Tender Pricing Strategy: How to Price to Win (2026)
Pricing is an art. Too high, and you lose points. Too low, and you go bankrupt. Practical strategies for competitive tender pricing.
The Price vs. Points Balance
Government tenders are not always awarded to the cheapest bidder. They are awarded to the bidder with the highest POINTS. Points are a combination of Price (usually 80 or 90 points) and Specific Goals/B-BBEE (20 or 10 points).
The Risk of 'Low-Balling'
New companies often bid at cost just to win work. This is dangerous. Government payment cycles can be slow (30-60 days). If you have zero margin for cashflow errors, you will collapse before the first payment arrives.
3 Pricing Methods
- Cost-Plus Pricing: Calculate costs and add a fixed % markup. Safe but maybe not competitive.
- Market-Based Pricing: Price based on what competitors charge. Risky if your costs are higher.
- Strategic Pricing: Lowering margin on the base contract to win, knowing you can make healthy margins on ad-hoc variations (risky but common).
The 'Details' Trap
Read the fine print. Does the price include delivery? Installation? Training? Warranty? If you leave these out and win, you have to provide them for free.
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Based on this article's topics, here are some current tenders that might interest you
MULTI-DISCIPLINARY PROFESSIONAL SERVICES TENDER TO SUPPORT WATER AND SANITATION ENGINEERING AND INSTITUTIONAL AND ORGANISATIONAL CAPABILITY DEVELOPMENT PROJECTS AND IMPLEMENTATION OF THE CITY OF CAPE TOWN WATER STRATEGY (WINNER-TAKES-ALL APPOINTMENT PER SERVICE CATEGORY) Category A: Engineering Services (Infrastructure, Systems and Engineering) Category B: institutional and Organisational Capability Development Projects (including Human Capital, Change Management and Governance)
APPOINTMENT OF A SERVICE PROVIDER FROM SITA RFB1183 FOR THE ESTABLISHMENT OF AN ICT PORTFOLIO MANAGEMENT OFFICE (PMO) TO DELIVER THE DIGITAL TRANSFORMATION STRATEGY (MICROSOFT-BASED PORTFOLIO MANAGEMENT) FOR A PERIOD OF THIRTY-SIX (36) MONTHS.
APPOINTMENT OF A STRATEGY ADVISORY PARTNER TO DELIVER A DIGITAL TRANSFORMATION AND ARTIFICIAL INTELLIGENCE STRATEGY
THE PROFESSIONAL IT SERVICES TO BE PROVIDED TO NTCSA TO DEVELOP A COMPREHENSIVE DIGITAL TRANSFORMATION STRATEGY.
FOR THE PROVISION OF PROFESSIONAL SERVICES FOR A SPECIALIST CONSULTANT TO DEVELOP AN ENERGY TRANSITION STRATEGY FOR TRANSNET PIPELINES
APPOINTMENT OF A SERVICE PROVIDER/CONSULTANT TO DEVELOP A COMPREHENSIVE NATIONAL DRY PORT STRATEGY FOR A PERIOD OF 24 MONTHS
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Tender Pricing Strategy: How to Price to Win (2026)
Pricing is an art. Too high, and you lose points. Too low, and you go bankrupt. Practical strategies for competitive tender pricing.