How to Read and Complete a South African Government Tender Pricing Schedule

Understanding the Three SBD Pricing Schedules

National Treasury prescribes three standard pricing schedules for government procurement in South Africa. Each serves a distinct purpose, and using the wrong schedule or completing it incorrectly is a frequent cause of bid disqualification.

SBD 3.1 — Firm Price Schedule

The SBD 3.1 is used for contracts where the price is fixed for the duration of the contract. It applies primarily to contracts with a delivery period or contract term of 12 months or less. Under a firm price arrangement:

• The price you quote on the closing date is the price you will be paid for the entire contract
• You bear all risk of cost increases — material price hikes, labour cost increases, fuel levies, exchange rate movements
• No price adjustment is permitted unless the contract contains a specific escalation clause (which is rare for firm price contracts)

Pricing strategy for SBD 3.1: Build an escalation buffer into every line item. If the contract runs 12 months and you expect 6% inflation, your effective margin is reduced by 6% over the contract life. The safest approach is to price using the cost structure you expect at the midpoint of the contract, not the cost structure on the day you submit.

SBD 3.2 — Adjustable Price Schedule

The SBD 3.2 is used for contracts longer than 12 months where price adjustment is permitted. This schedule allows you to recover cost increases during the contract term, but only if the adjustment mechanism is clearly defined in the contract.

Common adjustment mechanisms include:

• CPI-linked adjustment — price increased annually by the Consumer Price Index as published by Stats SA
• Proven cost increase — you must submit invoices or other proof that your input costs have risen
• Formula-based adjustment — a prescribed formula (e.g., labour component × wage index + material component × material index)

Important: An adjustable price schedule does not mean you can raise your price whenever you want. Adjustments are typically annual and require supporting documentation. The base price you submit is still the starting point, and adjustments are limited to the formula or mechanism prescribed in the contract.

SBD 3.3 — Formal Written Price Quotation

The SBD 3.3 is used for procurement between R2,000 and R500,000 (R2,000 to R2 million for construction contracts). It applies to the formal written quotation process, which is less rigorous than a full tender but still governed by Treasury Regulations.

The SBD 3.3 is a combined document that includes:

• The pricing schedule itself
• Preference points declaration (B-BBEE status level)
• Declaration of interest
• Terms and conditions

Although it looks simpler than SBD 3.1/3.2, the same pricing rules apply. The biggest mistake with SBD 3.3 is treating it casually — it is still a binding procurement document.

VAT Treatment Across All SBD Forms

VAT treatment varies depending on the specific tender and the instructions on the pricing schedule. There are three common patterns:

The critical rule: Check the instruction page of the tender document. Look for the phrase 'Prices are to be quoted ...' and identify whether it says 'VAT Inclusive' or 'VAT Exclusive'. This single determination can change your bid by 15%. If you are unsure, use the tender clarification process — never assume.

How Evaluators Score Your Price

Understanding how the government scores your price helps you price strategically. The price scoring methodology is prescribed by the PPPFA Regulations:

80/20 Preference Point System (R30,000 – R50 million)

For tenders valued between R30,000 and R50 million, price contributes a maximum of 80 points and B-BBEE contributes 20 points. Price is scored using the formula:

Points = 80 × (1 - (Pt - Pmin) / Pmin)

Where Pt = your price and Pmin = the lowest acceptable price. Under this formula, the lowest price gets 80 points. Every other price loses points proportionally. A bid that is 25% more expensive than the lowest gets 60 price points — it then needs 20 B-BBEE points to tie.

90/10 Preference Point System (Above R50 million)

For tenders above R50 million, price contributes 90 points and B-BBEE contributes 10 points. The formula is the same but with 90 and 10 replacing 80 and 20:

Points = 90 × (1 - (Pt - Pmin) / Pmin)

In the 90/10 system, price is even more dominant. If you are 10% above the lowest price, you score 81 price points — and you can only get a maximum of 10 B-BBEE points. This means that above R50 million, being price-competitive is essential regardless of your B-BBEE level.

Common Pricing Schedule Fields Explained

Practical Completion Checklist

Before you submit any pricing schedule, verify the following:

1. You are using the exact form provided in the tender document — not a photocopy, not your own format
2. All fields are completed — no blank cells, no empty lines
3. VAT treatment matches the instruction page
4. All arithmetic is formula-verified (not hand-calculated)
5. The grand total appears where required (usually the last summary page)
6. The price is initialled or stamped on every page if required by the bid instructions
7. Your B-BBEE verification affidavit or certificate is attached (this affects your final points)

Getting the pricing schedule right is not difficult — it is methodical. The bidders who win are the ones who treat the schedule with the respect it deserves. Register for free on Tenders SA

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