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.
Management of the short-term insurance 2021-06-04 12:00 SCM/2021/64/FIN
Provision of Lifeguard Training Services 2021-05-21 12:00 SCM/2021/56/COMM
The provision and installation of tiling at the public amenity in Laaiplek, Velddrif 2021-05-17 12:00 QUOTATION 8/2/28-2021 / MN94/2021
Request for Quotation: Installation and configuration of internet server 2021-05-12 12:00 No reference number
RE-ADVERT: Installation & Management of Alarm System/Technology for a period of 3 years 2021-05-14 12:00 ALM/SCM/15/2020-21
Request for Proposals: Development of a detailed feasibility study for the procurement of Gautrain Rapid Rail Link post 2026 project in accordance with treasury regulation 16 2021-06-04 11:00 GMA/002/21
Supply and installation of aluminium panels and doors at the Civic Centre, Riversdale 2021-05-13 12:00 RFQ 72804
Provision of secretariat services to assist with the standardisation and formatting of MS Word documents. 2021-05-11 13:00 EWSETA/RFQ/0/2021
Provision of graphic design services 2021-05-11 13:00 EWSETA/RFQ/08/2021
Provision of commercial property valuation services 2021-05-10 13:00 EWSETA/RFQ/07/2021
Provision of Banking Services (5 years) (re-advert) 2021-07-23 12:00 VDM/FIN/13/04/2021/02
Water Services cost recovery (36 Months) 2021-06-09 12:00 VDM/FIN/13/04/2021/01
Actuarial valuation on employee (36 months) 2021-06-09 12:00 VDM/FIN/30/03/2021/01
Preparation of GRAP compliant AFS (12 months) 2021-06-09 12:00 VDM/FIN/08/04/2021/01
Advertisement of Land Audit as part of IDP sector plan 2021-05-18 12:00 VDM/PLAN/23/03/2021/01
Review process Audit at Water and Waste Treatment works 2021-05-18 12:00 VDM/TECH/10/03/2021/02
Supply and Install Chip Dosers Wastewater Treatment 2021-05-18 12:00 VDM/TECH/10/03/2021/01
Supplying of Sanitisers, Gloves, and Face masks 2021-05-18 12:00 VDM/COMM/07/04/2021/01
Provision of Fleet Management System and Maintenance for three years (36 Months period) 2021-06-09 12:00 VDM/CORP/24/03/2021/01
Supply and Installation of High Mass Lights 2021-05-18 12:00 VDM/TECH/25/03/2021/01

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

Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.