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
APPOINTMENT OF A SERVICE PROVIDER TO CONDUCT ORGANISATIONAL REVIEW ALIGNED TO THE TURN AROUND STRATEGY 2024 FOR PERIOD OF 24 MONTHS
APPOINTMENT OF A SERVICE PROVIDER FOR THE DEVELOPMENT OF LIMPOPO PROVINCIAL WASTE ECONOMY (CIRCULAR ECONOMY) STRATEGY.
Appointment of a service provider for the development of an Enterprise Architecture (EA) and ICT strategy for the Social Housing Regulatory Authority
APPOINTMENT OF A SERVICE PROVIDER TO WORK WITH THE DEPARTMENT OF SPORT ARTS AND CULTURE (DSAC) AND THE MZANSI CRAFT COUNCIL (MCC) TO UNDERTAKE SOME REFINEMENTS TO AN ALREADY EXISTING CRAFT STRATEGY WHICH WILL INFORM THE WORK OF THE DSAC IN THE DEVELOPMENY OF THE CRAFT SECTOR OVER THE CURRENT MEDIUM TERM DEVELOPMENT PLAN (MTDP
THE APPOINTMENT OF A PROFESSIONAL SERVICE PROVIDER TO REVISE 2012 NATIONAL FORESTRY SECTOR RESEARCH AND DEVELOPMENT STRATEGY, FOR A PERIOD OF SIX (6) 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.