7 Tender Pricing Mistakes That Cost Contractors the Job

Most lost tenders aren't lost on quality — they're lost on price. Either you came in too high and a competitor took it, or too low and you won a job that lost money. Here are the seven pricing mistakes that quietly cost South African contractors the most work, and how to fix each one.

Mistake 1. Guessing rates instead of building them up

Sticking a round "per square metre" number on a line because it "feels about right" is the fastest way to a mispriced bid. A rate that isn't built from material + labour + plant is a gamble dressed up as an estimate.

Mistake 2. Using stale material prices

Cement, steel and fuel prices move constantly in South Africa. A quote you pulled three months ago can quietly erase your entire margin by the time the project starts.

Mistake 3. Under-pricing labour

Optimistic output rates — assuming a crew lays more per day than it really does — are the single biggest cause of loss-making jobs. Labour is where estimates most often break contact with reality.

Mistake 4. Forgetting or under-pricing P&Gs

Site establishment, supervision, insurances, guarantees and health & safety don't belong to any single BOQ line — and on short-duration jobs they can be a large share of the total. Bury them or forget them and the "profit" evaporates.

Mistake 5. Applying the same markup to every job

A single default markup ignores risk, competition and how much you want the work. Riskier, more specialised jobs deserve more margin; highly competitive commodity work needs a keener number.

Mistake 6. No sanity check before submitting

Rates that are wildly inconsistent with each other — or with past jobs — are a red flag for a missed cost or a decimal error. Submitting without a review is how a single typo becomes a signed loss.

Mistake 7. Submitting late — or not at all

The most accurate price in the world is worthless after the closing time. And the tender you didn't have time to price is a 0% chance of winning. Speed isn't a nice-to-have — it's a competitive weapon that lets you bid more work.