Issue Date: 
Thursday, October 31, 2019

Principles when pricing your tender

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

Many people ask the question “how must we work out our tender price?”, but there is no simple answer, because every tender is different, e.g. a tender for the supply of furniture will have a different pricing structure than a tender for the supply of food for a government function. So, to provide individual pricing techniques would be exceedingly difficult.

In general, there are these ten points that must be dealt with when calculating price:

  1. Price is king – ensure you price your product/service as low as possible, to stand a chance at winning a tender.
  2. Be precise, when the product supplied is R 101,26 then state it in the tender response as that and not as R 101,00 or even R 102,00.  Slight differences like these can amount to substantial amounts that can be lost, depending on the size of the tender.
  3. Ensure that all the costs of delivering the product/service are taken into consideration; double check your pricing – something small not included can be to your disadvantage.
  4. Confirm prices of goods with your suppliers.  Prices can change very quickly due to increases in fuel prices or exchange rate fluctuations.
  5. Always remember to add Value Added Tax (VAT) at 15% to your price, especially when it relates to Government tenders.  Most tenders state that the price must include VAT.
  6. Ensure that all other applicable taxes are included in the tender price.
  7. Most importantly, never bid too low or too high;
    • Bid Evaluation Committees are well informed, and they will know if a is bid too low or too high;
    • Bidding too low or too high might lead to a tender response being disqualified or marked as non-responsive;
  8. Law can influence pricing as well.  Several industries in South Africa, such as the cleaning industry, has minimum wages payable to employees;
  9. A suggestion is that if your usual mark-up is 25% then tender at 18% to 20%.  Remember that you are going to save on direct costs as well as on other expenses such as advertising, telephone costs and much more.  Use these savings to lower your price.
  10. Remember that in Government tenders you are going to be scored on your price, and currently price counts for 80 out of 100 points for tenders for less than R50 million, and 90 out of 100 points for tenders with a value of more than R50 million. The bidder with the lowest price receives the most points.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Servicing of 164 fire hose reels and 76 fire hydrants at Sandf Wonderboom Military Base 2021-10-05 11:00 ID 94092
Supply and delivery of 5mw rectifier. 2021-10-19 10:00 CRAC-ELF-36462
Supply and delivery of 5mw rectifier. 2021-10-19 10:00 CRAC-ELF-36462
The Upgrade Of District Road 1880 From KM 5.000 To KM 9.009 and Local Road 3620 From KM 0.000 To KM 2.907 in the Empangeni Region 2021-11-02 11:00 ZNB00379/00000/00/HOD/INF/21/T
Supply and delivery of tractor 2021-10-27 12:00 27/09/2021
Appointment of a Service Provider to render Water Treatment Services and Supply Chemicals at iThemba LABS, Cape Town for a period of Thirty-three (33) Months 2021-10-04 11:00 iLABS/RFP2021/22:13
Contractor appointment for alpha apron sprinkler pipe replacement at King Shaka International Airport 2021-10-29 11:00 DIA6716/2021/RFP
TENDER MN 97/2021 Panel of contractors for fencing installations for Kwadukuza Municipality for period of 3 years ref advert on KDM webpage 2021-11-01 12:00 MN 97-2021
Refurbishment of Blythedale Beach life savers tower ref advert attached for full details and enquiries 2021-10-15 12:00 MN 78/2021
Invitation to tender for lease of Eskom owned residential properties located in the Eastern Cape Kouga Municipal district 2021-10-18 10:00 IRP308
Appointment of a Service Provider to perform actuarial valuations, build and transfer actuarial model for a period 36 months. 2021-10-25 11:00 TCF 16 2021/22
Provision for deep cleaning services for a period of 12 months 2021-09-30 13:00 EWSETA/RFQ/054/2021
Appointment of a suitable service provider for the supply and delivery of 129 laptop computers for the Free State Community Education and Training College 2021-10-25 11:00 RFT02/2021
Supply And Delivery Of Asphalt Bags 2021-10-29 12:00 TDR225/2021/2022
Supply And Delivery Of Butterfly And Dual Plate Check Valves 2021-10-29 12:00 TDR231/2021/2022
Fiber Connectivity For Internet Bandwith And Mpls Vpn Service Connection For The Joint Operations And Disaster Management Centre 2021-10-29 12:00 TDR242/2021/2022
Painting of The Multimedia Filters at The Mossel Bay Desalination Plant 2021-10-22 12:00 TDR244/2021/2022
Leasing Of The Tolhuis Together With The Adjacent Building On A Portion Of Erf 1001, Ceres 2021-10-14 12:00 08/2/19/12
Periodic Maintenance, General Repairs And Provision Of Spare Parts For Sweeper 2021-09-30 12:00 08/2/19/03
Provision of internal audit services for a period of 3 years 2021-10-18 11:00 RFP 06/2021

Pages

Who is the bidder or his or her representative?

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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