Issue Date: 
Thursday, October 31, 2019

What to consider when I do my tender pricing

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

One of the most important parts of any tender is pricing.

All tender documents will tell you that it is not necessarily the lowest bid that will win the tender but that there are also other factors that influence the final decision.  This might be true but be assured that you will lose more tenders than you will win if you have the highest price.  Make sure to price your tender correct.

Dealing with the Standard Bidding Document 3 (SBD 3.1, 3.2 and 3.3), which is the pricing document, can be hair-raising.  In these documents they talk about firm prices, non-firm prices, professional service providers, exchange rates and lots more confusing matters.  There are three SBD 3 documents namely the:

  • SBD 3.1 for firm prices
  • SBD 3.2 for non-firm prices
  • SBD 3.3 for professional service providers.

Many people ask the question - how must we work out our tender price?  There is no straightforward answer because every tender is different.  The fact is that 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 thus providing individual pricing techniques would be exceedingly difficult.

In general, there are a couple of points that must be considered when you calculate your price.  These include:

  • Be precise; when your product that you supply is R10-26 then state it in the tender document as R10-26 and not as R10-00 or even R11-00.  Depending on the size of the tender, these minor differences can amount to substantial amounts that can be lost or influence the success of your tender.
  • Ensure that you take all your costs into consideration; double check your pricing – something small left out can come back and bite you later.
  • Always remember to add Value Added Tax (VAT) at 15% to your price.  The tender committees want to see the purchase price.  They do not want to sit with a calculator and calculate what your price is supposed to be when VAT is included.  Most tenders state that the price must include VAT.
  • Try and quote firm prices, even if the tender duration is more than 12 months.  Tender committees are hesitant for non-firm prices.

If you apply these points above, your pricing will be less of a challenge.

Another piece of advice is to draw up your own pricing schedule and to refer back to your own pricing schedule on the SBD 3 document, because every supply is unique and to try and fit your pricing into the SBD 3 forms is usually not possible.  You will find that almost all bidders do this.  Your tender would not be judged as non-responsive by using a separate pricing schedule.

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.
Provision of Banking Services for a period of 5 years 2020-05-15 12:00 SCM/11/2019-20
Supply: Electrical Equipment & Components - Elec-equipment 2020-04-28 12:00 GH12002060
Disposal Of Various Equipment/Scrap 2020-04-30 10:00 WTB002288
Supply and delivery of Fan Impeller and Fan Electric 2020-04-24 11:00 6000235154
Provision of Diving Personnel Services For PetroSA 2020-05-15 12:00 CTT23927
Request for Quotation (RFQ) for the supply of Management and Storage Servers to the CSIR 2020-05-05 16:30 9224/05/05/2020
Land Port of Entry :Golela and Onverwacht: Appointment of a Service Provider/S for The Maintenance and Repairs of Building, Civil, Mechanical, Electrical Infrastructure and Installations for a period of 36 months 2020-05-15 11:00 H19/036 AI
Land Ports Of Entry: Monantsa Pass and Peka Bridge: Appointment of a Service Provider: Maintenance, Servicing and Repair of Buildings, Mechanical and Electrical Infrastructure and Installation at the Ports of Entry for a Period of: 36 Months 2020-05-20 11:00 H19/035 AI
Legal Services Panel 2020-05-11 11:00 IEC/LS-01/2020
Road Distribution and Warehousing Services 2020-05-15 11:00 IEC/LG-01/2020
The South African Social Security Agency hereby invites proposals from potential service providers to bid for the accreditation of service providers to render branding services for SASSA Mpumalanga Region for a period of 36 months (3) Years. 2020-04-24 11:00 SASSA: 47- 19- COM- MP
Request for Information for Co-operatives manufacturing Toilet Paper in Gauteng 2020-04-10 11:00 GT/ GDSD/ 020/ 2020
Request for Information for Co-operatives manufacturing Packaging 2020-04-10 11:00 GT/ GDSD/ 021/ 2020
The Department of Agriculture seeks a service provider for the conducting and roll out of the implementation of the Recognition of Prior Learning (RPL) project 2020-04-23 11:00 BID 869 - 2019/ 2020
Appointment of a Service Provider to Conduct International Benchmarking of the South African NSC With CIE, IB, Kenya, Ghana and Zimbabwe 2020-04-24 12:00 UMALUSI (19- 20) T0014
Appointment of a panel of Trainers to train researchers and M&E experts for the period ending 31st March 2023 2020-05-11 11:00 RFP/ SASSETA/ 201920112/ 1/ 2
Appointment of an experienced Photography and Videography Service Provider from date of appointment until 31st March 2023 2020-05-11 11:00 RFP/ SASSETA/ 201920131
Terms Of Reference for Procurement Of Office Furniture for the ETDP Seta Head Office 2020-05-08 11:00 SCMU: 15 - 2019/ 20
RFP 01-2019: Provision of a Production Management and Track and Trace Solution for cigarettes 2020-04-30 11:00 RFP 01- 2019
Supply and Delivery of Coal Peas for National Health Laboratory Service 2020-04-30 11:00 RFB 135/ 19/ 20

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