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.
Construction and commissioning of ash slurry and ash water return piping for the Camden AHPU (Ash Handling Plant Upgrade) Project. 2020-11-23 10:00 MPPPSC001176
Supply and delivery of 29 laptops to BBI head office 2020-10-28 12:00 RFQ8482
Supply and delivery of data radios and protection boards at Transnet Frieght Rail Parkstation, Johannesburg. 2020-10-27 10:00 RFQ CRAC EFQ 32518.
The refurbishment and erection of cattle guard fencing on the Transnet Railway Reserve at Salkor in Saldanha from Loop 6 – Loop 9 2020-11-10 10:00 SAZ 5153/2020
Upgrading of MV and LV electrical network in Villiersdorp and Riviersonderend 2020-11-27 12:00 ELEC 06/2020/21
Construct new cable trenches, demolish, modify and create new foundations. Dismantle and erect steelwork. Replacement of primary and secondary plant equipment. Installation of new plant equipment for new feeder bays and decommissioning of all associated cabling and stringing at Muldersvlei Substation. 2020-11-24 10:00 E/TP3817-LD(R)
Request for proposal for provision of cleaning, hygiene & horticulture services for Wolmerton depot and or PRASA various depots in Northern Gauteng Region 2020-11-20 12:00 CRES/NGR/52/01/2020
Provision of pest control, hygiene, cleaning, gardening, Grass cutting and weed control services at Jupiter, George goch, India, Union and Rooikop for period a twenty-four (24) months. 2020-10-27 10:00 RFQ CRAC JHB 32854.
For the provision of hygiene, deep cleaning and pest control services at 101 Loveday and George Goch depots for two (2) years. 2020-10-27 10:00 RFQ CRAC-JHB-34141
Cleaning services for 24 months - Wentworth Magistrate Court 2020-10-27 11:00 DBNQ20/10/05
Supply and support of the Google Apps suite for business and vault services for SARAO for a period of 3 years 2020-10-30 11:00 NRF/SARAO SICT/33/2020-21
Supply and delivery of notebook computers at head office 2020-11-06 11:00 PUDP 770
Appointment of the service provider for the supply, delivery and installation of zippel filling cabinets to PPSA Nationally (once off project) 2020-11-13 11:00 PPSA 010/ 2020
ICT Security Awareness Training 2020-10-29 11:00 3120
Employee Assistance Programme 2020-10-30 11:00 3020a
Appointment of a service provider to implement, commission and support ticket sales system for Robben Island Museum (RIM) for a period of sixty (60) months (five years) 2020-11-13 11:00 RIM ICT 01- 2020/ 2021
Appointment of a panel of service providers to provide advanced driving skills for defensive and offensive driving for the RTMC Nationally for a period of three (3) years 2020-11-09 11:00 RTMC BID 13/ 2020/ 21
Terms of Reference to Request for Bids from Service Providers for Bid No OCJ2020/02: to Provide Infrastructure Refresh (Server, Storage and Virtualization) Including Support And Maintenance for the Period Of 36 Months to the Office of the Chief Justice (OCJ) 2020-11-09 11:00 OCJ2020/ 02
Terms of reference to request for bids from service providers for bid no OCJ2020/03: Advertisement for the supply of network equipment (routers and switches) for selected superior courts 2020-11-06 11:00 OCJ2020/ 03
RT70-2021: Supply and delivery of petrol; automotive diesel fuel; illunminating parafin; marine gas oil; heavy furnance oil; polar diesel and aviation fuel to the State for the period 01 April 2021 to 31 March 2026. 2020-11-16 11:00 RT70- 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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