How to Build a Tender Costing Sheet for Labour, Materials, Transport and Overheads

A pricing schedule tells the procuring institution what you'll charge. A costing sheet is the working document that tells you whether that price actually makes you money. Many South African SMMEs skip straight to the pricing schedule and reverse-engineer a number that 'feels competitive' — which is exactly how bids end up winning the tender and losing the business. This article sets out how to build a costing sheet that separates every real cost category before you decide on a price.

Why a Separate Costing Sheet Matters

The pricing schedule in a tender document is a submission format, not a planning tool — it's usually just a table of line items and totals. A costing sheet sits behind it, breaking every line item down into its underlying cost drivers, so that when you enter a number into the pricing schedule, you know exactly what it needs to cover and what margin, if any, is left over.

Without this separation, it's easy to price a contract based on what a competitor charged last time, or what feels roughly right, without ever calculating whether the number covers your actual costs. That gap is where thin-margin and loss-making tenders come from.

The Five Cost Categories Every Sheet Should Separate

Building the Sheet, Line by Line

1. Start from the scope of work, not the pricing schedule — list every activity or deliverable the tender requires, even ones the pricing schedule doesn't ask you to price separately.
2. For each activity, cost labour, materials, and transport independently, using your own current supplier and wage rates rather than historical figures from a previous bid.
3. Apportion a realistic share of overheads to the contract based on its expected duration and scale, not a flat percentage copied from a different-sized job.
4. Add a contingency line for scope ambiguity or site conditions you can't fully verify before award — this is not padding, it's risk pricing.
5. Only after all of the above is added up, apply your target margin — and check the resulting total against what the market and the tender's likely budget can bear before finalising it.

Where the Costing Sheet Feeds Into Other Decisions

A properly built costing sheet does more than produce a price. It tells you which line items are most sensitive to error — usually materials with volatile pricing or labour on jobs with uncertain site conditions — so you know where to build in contingency. It also gives you the evidence to walk away from a contract where the achievable price, once real costs are accounted for, doesn't leave a viable margin, which is the subject of our companion article on financial red flags in tender documents.

For the specific mistakes that turn a correctly costed bid into a disqualified one, see our guide to common tender pricing mistakes. For multi-year contracts, also read our guide on price adjustment and escalation mechanisms.