Key Factors to Keep in Mind When Determining Tender Pricing

Pricing is a critical aspect of any tender submission. While it’s true that the lowest bid doesn’t always guarantee winning a tender, pricing plays a significant role in the decision-making process. If your tender price is too high, you may lose out on opportunities. However, navigating through the Standard Bidding Document 3 (SBD 3.1, 3.2, and 3.3) which includes pricing can be overwhelming with its technical jargon and complexities.

Here are some general points to consider when calculating your tender price:

1. Be precise: Ensure that you state your product price accurately in the tender document. Small differences in pricing, such as rounding off, can add up to significant amounts and affect the success of your tender.
2. Include all costs: Double-check your pricing to make sure you have accounted for all your costs. Overlooking even minor expenses can come back to haunt you later.
3. Factor in VAT: Remember to add Value Added Tax (VAT) at the applicable rate (usually 15%) to your tender price. Most tenders require the price to be inclusive of VAT, and tender committees prefer seeing the final purchase price without having to calculate VAT separately.
4. Quote firm prices: Whenever possible, try to provide firm prices, even if the tender duration is more than 12 months. Tender committees tend to be cautious with non-firm prices.
5. Create your pricing schedule: Developing your pricing schedule and referring back to it in the SBD 3 document can be beneficial. Each supply is unique, and fitting your pricing into the standard forms may not always be feasible. Many bidders follow this approach, and it doesn’t make your tender non-responsive.

By keeping these points in mind, you can approach tender pricing with more confidence and increase your chances of submitting a competitive bid. Remember, accurate and well-thought-out pricing is crucial for a successful tender submission.