RFQ Pricing Strategy: How to Quote and Win in South Africa
A winning RFQ price in South Africa is not the lowest number you can survive on. It is a firm, VAT-correct, fully itemised price that matches your paperwork exactly, sits in a believable market range, and is backed by the preference points you can legitimately claim. Get those four things right and a modest quote can beat a cheaper one. Get one wrong and the cheapest quote on the page can be disqualified before anyone reads the total.
This guide walks through how government buyers evaluate quotations, how to build your price from cost upwards, and the traps that knock out otherwise strong SMME bids.
TL;DR
- Government RFQs need firm prices. Quotes subject to exchange-rate variation are generally not accepted unless the document says otherwise.
- Price is only part of the score. Under the 80/20 and 90/10 systems, specific goals add points, so the cheapest bid does not automatically win.
- Itemise your costs on the pricing schedule (SBD 3.1 or the buyer's equivalent). A competitive total with no breakdown can still be rejected.
- Your total on the form must match the figure you capture on the eTender portal to the cent, and your VAT status must be stated correctly.
- Build the price from real costs, add a defined margin, then test it against the validity period, delivery and escalation risks before you submit.
Table of Contents
- What an RFQ is, and why price carries so much weight
- How evaluators actually read your price
- Firm prices, VAT and delivery: the compliance layer
- Build the price from cost, not from guesswork
- Preference points: price is not the whole score
- Seven mistakes that cost SMMEs RFQs
- Our view: price the risk, not the rival
- A pricing routine you can repeat for every RFQ
- Finding RFQs worth pricing
- Where ProTenders fits
- FAQ
- Sources
What an RFQ is, and why price carries so much weight
A request for quotation is the lighter, faster cousin of a full tender. The buyer has already defined what it wants, and asks a few suppliers to say what it will cost and when it can be delivered. Because the specification is fixed, price and delivery become the main points of difference, which is why pricing strategy matters more here than in a long, narrative bid.
That does not mean the lowest price wins. National Treasury's implementation guide to the Preferential Procurement Regulations, 2022 sets two scoring systems. For contracts up to R50 million, the 80/20 system gives 80 points to price and 20 to specific goals. Above R50 million, the 90/10 system gives 90 points to price and 10 to specific goals. Bidders must also be registered on the Central Supplier Database (CSD) and submit all required SBD forms to be considered.
So your pricing strategy has two jobs at once: land a price score that is competitive, and avoid anything that makes the evaluator question whether the number is real.
How evaluators actually read your price
Public buyers do not pick the quote they like best. They check compliance first, then score. The National Treasury's e-SPF guidance on suppliers' pricing approach makes the point that suppliers use many pricing models, but evaluators favour objective, firm pricing that can be compared directly across bidders.
In practice an evaluator will go through your quote in roughly this order:
- Are all documents there and signed? Departmental directives such as the Department of Water and Sanitation RFQ directive state that SBD forms must be fully completed, signed and uploaded when responding.
- Is the price firm, in rand, and tax-inclusive where required?
- Does the breakdown add up to the total?
- Is the price market-related? Without a breakdown the evaluator cannot verify this.
- Only then: price points plus preference points.
If you fail at step 1 or 2, your clever pricing never gets scored.
Firm prices, VAT and delivery: the compliance layer
This is the part of RFQ pricing that has no strategy, only rules. Treat it as a checklist.
Firm means firm
The standard pricing schedule, SBD 3.1, is headed "Firm Prices (Purchases)", and a typical RFQ on the eTender portal states that only firm prices are accepted and that prices subject to exchange-rate variation will not be considered. Some buyers do allow escalation to be declared. The CSIR's RFQ for XGRC licensing asks for prices in rand including all applicable taxes, and requires escalation or exchange-rate exposure to be clearly indicated. The lesson: read each document's pricing clause. Never assume the last RFQ's rules apply to this one.
If you import stock, do not hope the rand holds. Either buy forward, hold stock, or build a buffer into the price. A firm price with no buffer is a bet on the exchange rate.
Taxes and delivery
Prices must include all applicable taxes, and you should state explicitly whether the price covers delivery to the prescribed destination. A quote that leaves delivery vague invites the evaluator to assume the worst or to disqualify you. Write it plainly: "Price includes delivery to [address] within [number] working days of order."
Your VAT status
If you are a registered VAT vendor, quote inclusive of VAT as the document requires and show the VAT amount separately on the schedule. If you are not registered, quote without VAT and say so on the schedule. A non-vendor who adds VAT to a price risks having the entity treat the total as all-inclusive, which means you absorb the cost or become non-compliant if you try to add it later. State your status clearly in writing every time.
Validity period
Buyers set how long your price must hold. One RFQ published on eTender asks bidders to tick a validity of 30, 60, 90 or 120 days. Other buyers fix it at 60 days. A longer validity means you carry supplier price risk for longer, so cost it in. If your supplier will only hold their price for 14 days, your 90-day firm quote has a hole in it.
Build the price from cost, not from guesswork
The pricing models you read about in B2B guides (cost-plus, competitive, value-based, penetration) all exist in the public sector, but they carry different risk on an RFQ.
| Approach | How it works | Fit for government RFQs |
|---|---|---|
| Cost-plus | Add a set margin to your real costs | Safest default. Easy to itemise and defend |
| Competitive | Price against what rivals or past awards suggest | Useful as a check, dangerous as the starting point |
| Penetration | Price very low to win the first contract | Only if the margin still covers risk and cash flow |
| Value-based | Price on benefit delivered | Hard to use. The specification is fixed, so the buyer is not paying for extra value |
A worked example
Imagine you are quoting 40 sets of branded protective workwear for a municipality, delivered to a depot. The numbers are illustrative, not market data.
| Cost line | Amount |
|---|---|
| Garments from supplier (40 × R620) | R24 800 |
| Branding and set-up | R3 200 |
| Delivery to depot | R1 500 |
| Buffer for supplier price risk (3%) | R885 |
| Total direct cost | R30 385 |
| Margin (15%) | R4 558 |
| Price excluding VAT | R34 943 |
| VAT at 15% | R5 241 |
| Price including VAT | R40 184 |
Where SMMEs underprice
The usual errors are quiet ones: forgetting the cost of tender documents and printing, leaving out courier or travel to a distant site, ignoring a 30-day or longer payment cycle, and not pricing the cost of finance while you wait. If you subcontract people rather than employ them, agree terms in writing before you quote. A solid freelancer contract template for South Africa helps you fix rates and deliverables so the cost in your quote is the cost you will actually pay.
Preference points: price is not the whole score
The Treasury guide explains that specific goals, such as B-BBEE status or local ownership, are scored on top of price. Which goals apply is set by the buyer for each procurement, and the buyer must state them in the invitation. That has a practical consequence: a slightly higher price from a bidder who earns the specific-goals points can beat a lower price from one who does not.
Build this into your pricing thinking:
- Read the invitation for the stated specific goals before you set a price. Do not assume.
- Claim only what you can prove. Have the certificates, affidavits or documents ready, because a claim without proof scores nothing and can create bigger problems.
- Do not discount away your margin to chase price points if your preference points already put you ahead. Price points are comparative, so an unnecessarily deep cut costs you money without moving you far.
- Run both scenarios. Estimate how the points might fall at your price and at a price 5% lower. Often the difference is small.
The Treasury's guideline on specific goals also warns buyers that complicated, multi-goal setups raise the risk of errors in evaluation. As a bidder, that is your cue to keep your own submission simple and easy to score.
Seven mistakes that cost SMMEs RFQs
- Total on the form does not match the portal. Insiders note that your total on the SBD 3.1 or equivalent must equal the amount captured in the eTender system, and even a rounding difference can disqualify you. The system figure is often treated as the official one, so capture it last, and read it twice.
- No breakdown where one is required. Evaluators cannot verify a bare total is market-related.
- Wrong VAT treatment. See above. State your status on the schedule.
- Copying government staff on your email. Some RFQ templates treat copying an internal staff member as an attempt to influence the process. Send only to the address given.
- Signature dates that do not line up. Directives such as the DWS one require SBD forms to be completed and signed, with dates consistent with the submission. Check each form before you upload.
- Missing a compliance pre-qualification. Some RFQs, such as this training-related request, set pre-qualification requirements, such as valid accreditation, that must be met before price is looked at.
- Sending to the wrong place or late. Some buyers accept only email to a named address by the closing time. Others use the portal. Follow the instruction exactly.
Our view: price the risk, not the rival
We see SMMEs spend hours guessing what competitors will quote and minutes checking their own costs. It should be the other way round. You cannot see anyone else's number, but you can see your own, and you can see the buyer's rules. A quote that is firm, itemised, correct on VAT and consistent across the form and the portal gives evaluators very little reason to mark you down.
Our approach at ProTenders follows from how the process works. Find the right opportunities early, check your compliance before you price, use templates so the paperwork is consistent, and only then decide the number. That is why the platform pairs tender search with compliance scorecards, document templates and a bid workspace, rather than treating discovery as the finish line. A price is only as good as the bid it sits inside.
One more point from experience of how SMMEs work: winning is not the end of the pricing question. A contract at a margin that cannot cover your cash-flow gap between delivery and payment can hurt you more than a lost bid. If you will need finance to deliver, price that cost in and line up funding before you submit, not after the award letter arrives.
— Dolene April
A pricing routine you can repeat for every RFQ
Use this sequence each time. It takes less time than redoing a rejected quote.
- Read the whole document first. Note the closing time, submission method, validity period, pricing schedule, specific goals and any pre-qualification.
- List every cost. Product, labour, travel, delivery, insurance, compliance documents, finance cost.
- Get written supplier quotes that hold for the validity period.
- Add a risk buffer for exchange rate, escalation or delay, sized to the real exposure.
- Set your margin and calculate the price excluding VAT, then the VAT line if you are a vendor.
- Sense-check against the market. Look at similar past awards and your own history. If you are far below, ask what you have missed. If far above, ask what you have included that the buyer did not ask for.
- Complete SBD 3.1 or the buyer's schedule, sign and date every form.
- Capture the price on the portal and compare it to the form, figure by figure.
- Submit early, to the exact address or portal required, and keep proof.
If you want more detail on the whole path from search to award, see our guide on how to get government tenders in South Africa, and keep a bid calendar so closing dates do not catch you half-priced.
Finding RFQs worth pricing
Not every RFQ deserves a quote. Price only where you can meet the specification, the location makes sense, and you hold the compliance documents. Sector pages help you focus: cleaning tenders, transport and fleet tenders and government IT tenders each collect live opportunities by category, and tenders in Johannesburg narrow things by place. Free daily tender alerts mean RFQs with short windows do not pass you by, which matters because a short window leaves less time for supplier quotes.
Where ProTenders fits
You can browse live national, provincial and municipal tenders on ProTenders without signing up. When you are ready to bid seriously, the paid plans add the tools that make pricing and paperwork faster: Pro is R1 990 per year, Business is R3 990 per year, and Enterprise starts from R999 per month. The Free plan costs nothing. Compare them on the pricing page. If a won contract needs working capital, our business funding programmes page lists options to explore.
FAQ
Should I always quote the lowest price on an RFQ?
No. Price carries most of the points under the 80/20 and 90/10 systems, but specific goals add to the score, and a bid that fails on compliance is never scored at all. Quote a price that covers your costs, risk and margin, then check it is market-related.
Do I include VAT in a government RFQ price?
If you are a registered VAT vendor, follow the document and include VAT, showing it separately. If you are not registered, quote without VAT and say so on your pricing schedule. Adding VAT later as a non-vendor can leave you absorbing the cost or non-compliant.
Can I change my price after submitting?
Assume not. Prices must be firm and hold for the validity period stated in the RFQ, such as 30, 60 or 90 days. If you spot a mistake before the closing time, check the submission instructions and resubmit in the way they allow, and never contact the evaluators to negotiate.
What happens if my SBD 3.1 total differs from the portal?
That discrepancy can disqualify the bid, even when it is a small rounding difference. The system price is often treated as the official figure, so make the form and the portal match exactly before you submit.
Sources
- Preferential Procurement Regulations, 2022 implementation guide (National Treasury)
- 3.3.5 Suppliers' Pricing Approach (National Treasury e-SPF)
- RFQ directive (Department of Water and Sanitation)
- Request for quotation with SBD 3.1 firm prices (eTender portal)
- CSIR RFQ with pricing requirements (eTender portal)
- RFQ with validity period options (eTender portal)
- RFQ with compliance pre-qualification (eTender portal)
- Guideline on specific goals (eTender portal)