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.
Request for proposals for the appointment of a suitable service provider to provide provision of offsite storage for records and files for the NHBRC for a period of five (05) years 2020-11-06 11:00 NHBRC 02/ 2020
Appointment of a service provider for filmmaker / documentary production for imprint of education study. 2020-11-06 11:00 HSRC/ 03/ 2020/ 21
Appointment of a service provider for the renovation of reception area at the South African Nursing Council 2020-11-12 11:30 RFQ 36/2020
Appointment of a service provider for the provision of document management service and off-site storage facilities for a period of 36months. 2020-11-10 11:00 HDA/ JHB/ 2020/ 023
Appointment of external auditors for the Housing Development Agency (HDA). 2020-11-06 11:00 HDA/ JHB/ 2020/ 008
Re-advertised appointment of a service provider to provide suitable premises for the Northern Cape Office. 2020-11-06 11:00 HDA/ NC/ 2020/ 001
Western Cape Province: All Regions: Mobile classrooms and structures: 3 year framework agreement. 2020-11-10 11:00 F009/ 20
Security services at Ga-Rankuwa Rearabilwe Child and Youth Care Centre 2020-11-06 11:00 GT/ GDSD/ 047/ 2020
91 Ammunition Depot: Naboomspruit: Implementation of repair work and maintenance of compressor systems. 2020-11-10 11:00 PLK 20/ 16
Cape Town: Parliament Precinct: Provision of temporary infrastructure: operational and structural requirements: marquees, tents, media scaffolding and audio vision: SONA 2021 2020-11-06 11:00 CPTSC 13/ 20
Kimberley: Construction of Double ECD Classrooms at Lucretia Intermediate School CIDB 3GB or Higher 2020-11-17 11:00 DRPW 003/ 2020
Mothibistad: Lareng Primary School construction of ten classrooms, double ECD, medium admin block and repairs and renovations CIDB 6GB or Higher 2020-11-17 11:00 DRPW 009/ 2020
Hartswater: Construction of Double ECD,Major repairs and renovations at Voorspoed Primary School. CIDB GRADING:4 GB or Higher 2020-11-17 11:00 DRPW 004/ 2020
Longlands: Construction of Double ECD,Major repairs and renovations and repair to Borehole at GN Pressly Intermediate School CIDB 4GB or Higher 2020-11-17 11:00 DRPW 002/ 2020
ZNTD 04983W: WIMS 073202: KZN: Department of Health: eThekwini District: Maphumulo: Inanda: Qadi Clinic: Replace existing perimeter fence Contract period: 03 months 2020-11-17 11:00 ZNTD 04983W
ZNTD 04963W: WIMS 073166: KZN: Department of Health: eThekwini District: Umkomaas: Sheshisa Primary School: Minor repairs Contract period: 04 months 2020-11-17 11:00 ZNTD 04963W
ZNTD 04986W: WIMS 073198: KZN: Department of Health: eThekwini District: KwaNdengezi: KwaNdengezi Clinic: Replacement of asbestos roof sheeting Contract period: 06 months 2020-11-17 11:00 ZNTD 04986W
ZNTD 03291W: WIMS 058836: KZN: Department of Education: eThekwini Region: Umlazi: Menzi High School: Upgrades and additions Contract Period: Thirty (30) months CIDB Grade: 7GB or higher 2020-11-18 11:00 ZNTD 03291W
ZNTD 05031W: WIMS 073323: KZN: Department of Health: iLembe District: Maphumulo: Isithundu Clinic: Eradication of asbestos roof sheeting Contract period: 03 months 2020-11-16 11:00 ZNTD 05031W
ZNTD 05033W: WIMS 073326: KZN: Department of Health: iLembe District: Gingindlovu: Dokodweni Clinic: Eradication of asbestos roof sheeting Contract period: 03 months 2020-11-16 11:00 ZNTD 05033W

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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