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.
For multiple supplier bid TBH 514/1/2017 (supplementary): The supply and delivery of perfusion and cardiothoracic surgery requirements to Groote Schuur, Tygerberg and Red Cross War Memorial Children’s Hospitals for a period of ten (10) months, effective 1 January 2021 until 31 October 2021 2020-11-13 11:00 TBH 514/ 1/ 2017
For the supply, delivery, collection, sterilize and resupply of reusable gowns, drapes, trolley covers and minor procedure kits for the Anaesthetics & Theatre Services Department At Tygerberg Hospital, effective 1 January 2021 until 31 December 2024 2020-11-13 11:00 TBH 501/ 20
Thermometer self-indicating, digital battery operated. Validity 120 days. 2020-11-17 11:00 SPSC- B- 006- 2020
The Supply, Delivery, Installation, Demonstration and Training of Personnel of 1 x Automated Slide Stainer and Coverslipper at 1 Military Hospital. 2020-11-16 11:00 CPSC- B- M- 168- 2019R
Supply, delivery and product training for ultra- high frequency analogue portable two-way radios including maintenance for a period of two (2) years in accordance with specification number 32187/19: Division: Technology Management Services 2020-11-13 11:00 Bid no. 19/ 1/ 9/ 1/ 26TR (20)
Procurement of hardware support and license renewals for the F5 Load Balancers used at the Government Pensions Administration Agency for a period of twelve (12) months 2020-11-06 11:00 RFB 2276/ 2020
Supply, Install and Configure the Identity and Access Management to SAPS with Maintenance and Support for a period of thirty-six (36) months. 2020-11-06 11:00 RFB 2277- 2020
ICT Services for a period of three years (36 months) 2020-10-30 11:00 FFC 10- 09- 2020
Security Services for the Western Cape PEO and Warehouse 2020-10-30 11:00 IEC/ WC- 03/ 2020
Pretoria Regional Office : Request For New Office Accommodation For Department Of Trade And Industry (BBBEE COMMISSION) For 2275.00 Sqm And 85 Parking Bays For A Period Of Five (5) Years In Centurion 2020-10-30 11:00 H20/ 008PF
Servicing, Maintenance & Repairs To Pneumatic Air Tube At Nelson Mandela Academy Laboratory, Cecilia Makiwane Laboratory for a Period of Three (3) Years 2020-11-10 11:00 RFB 041/ 20/ 21
CapeNature seeks a service provider for the Supply and delivery of Fire Suits - Local content conditions apply 2020-10-30 11:00 WCNCB 01/ 10/ 2020
The tender is for the manufacturing and supply of Corporate Clothing to the Perishable Products Export Control Board (PPECB) for a period of three (3) years, with an option to renew for further one (1) year. 2020-11-09 11:00 RFP/ MC/ CC/ 2020/ 16
Supply and Delivery of Personal Protective Clothing and Equipment 2020-11-16 11:00 LNW 01/ 20/ 21
Supply and Delivery of Traffic Uniforms. DTI Threshold of 100% Local Content & Production 2020-11-18 11:00 S018/ 20
Appointment of a Panel of Service Providers to Supply and Delivery Of Blankets to the Provincial Disaster Management Centre Local Content Textile (Blankets) 2020-11-19 11:00 ZNT 1904/ 2018 LG
Request for Information for Co-operatives manufacturing school uniform in Gauteng 2020-11-06 11:00 GT/ GDSD/ 048/ 2020
Supply and Delivery of Compression Therapy Consumables to all Institutions within the Department Of Health: Western Cape Government for a Three-Year Period 2020-11-13 11:00 WCGHCO07/ 2019
Appoinment of Service Provider to Conduct an Organization Development study for BANKSETA 2020-12-17 11:00 BS/ 2019/ RFB447
Appointment of the service provider for the supply, installation and maintenance of DELL Core switch for a period of three (3) years 2020-11-13 11:00 PPSA 009/ 2020

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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