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.
ZNTD 05032W: WIMS 073324: KZN: Department of Health: iLembe District: Maphumulo: Isithundu Clinic: Replacement of perimeter fence Contract period: 03 months 2020-11-16 11:00 ZNTD 05032W
ZNTD 05026W: WIMS 073385: KZN: Department of Health: iLembe District: Ndwedwe: Thafamasi Clinic: Replacement of perimeter fence Contract period: 03 months 2020-11-17 11:00 ZNTD 05026W
ZNTD 05048W: WIMS 073367: KZN: Department of Health: iLembe District: Kranskop: Mphise Clinic: Replacement of perimeter fence Contract period: 03 months 2020-11-16 11:00 ZNTD 05048W
ZNTD 05027W: WIMS 073384: KZN: Department of Health: iLembe District: Ndwedwe: Wosiyane Clinic: Replacement of perimeter fence Contract period: 03 months 2020-11-17 11:00 ZNTD 05027W
ZNTD 05018W: WIMS 073389: KZN: Department of Health: iLembe District: Kranskop: Amandlalathi Clinic: Eradication of asbestos roof sheeting Contract period: 03 months 2020-11-17 11:00 ZNTD 05018W
Rendering of security services for the Department of Public Works at no: 159 Public Works House for a period of 24 months. 2020-11-10 11:00 PT20/ 004
Appointment of a service provider to conduct a client satisfaction survey for the Government Employees Housing Scheme (GEHS). 2020-11-06 11:00 DPSA002/ 2020
Appointment of a service provider to render services for the compilation, design, layout and printing of the human resource training manual (resource book) and production of flow chart posters for the Government Employees Housing Scheme (GEHS). 2020-11-06 11:00 DPSA001/ 2020
For the service, repair, inspection, re-certification where required of autoclaves in accordance to latest revision of the occupational health and safety act and amendments at Tygerberg Hospital for a period of three (3) years effective 1 January 2021 till 31 December 2023 with the option to extend on a month to month basis not exceeding 4 months. 2020-11-13 11:00 TBH 503/ 2020
Appointment of service providers to provide catering services to the Department of Cooperative Governance (DCOG) for a period of thirty six (36) months. 2020-11-06 11:00 COGTA (T) 01/ 2020
Appointment of a service provider to provide office lease space on a lease agreement for the CCMA Bloemfontein office for a period of five (5) years. 80/20 Principle will apply. 2020-11-06 11:00 CCMA/ 2020/ 12(A)- FS
Framework contract: construction of factories, access roads and related engineering services in the Tshwane Automotive SEZ (TASEZ): CIDB GRADE 8 GB. 2020-11-09 12:00 CDC/ 376/ 20
For the supply and delivery of fresh meat products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 January 2021 until 31 December 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-11-13 11:00 TBH 310/ 2020
For the supply and delivery of various chicken products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 January 2021 until 31 December 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-11-13 11:00 TBH 309/ 2020
For the supply and delivery of frozen fish products for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 January 2021 until 31 December 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-11-13 11:00 TBH 311/ 2020
For the supply and delivery of annual fruits for the Food Services Department at Tygerberg Hospital for a twelve (12) month period, effective 1 January 2021 until 31 December 2021 with the option to extend on a month to month basis not exceeding four (4) months 2020-11-13 11:00 TBH 308/ 2020
Supply and delivery of crutches and walking aids to the State for the period ending 30 June 2023 2020-11-05 11:00 RT40- 1- 2019
RT32-1-2019: Supply and delivery of surgical sundries to the State for the period ending 30 September 2022 2020-11-09 11:00 RT32- 1- 2019
Supply and delivery of anti-infective medicines (antibiotics, antifungal, antiprotozoal and antiviral agents) to the Department of Health for the period 1 October 2021 to 30 September 2023 2020-11-30 11:00 HP02- 2021AI
Supply and delivery of anti-tuberculosis medicines to the Department of Health for the period 1 October 2021 to 30 September 2023 2020-11-30 11:00 HP01- 2021TB

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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