How South African tenders are scored: 80/20 and 90/10
Every tender is a scoreboard. See how price points are calculated, how the buyer's specific goals add up to 20 or 10 points, and why the cheapest bid does not always win, with a worked example from the 2022 regulations.
Worked example with illustrative bids. Rules: Preferential Procurement Regulations, 2022 (GN 2721), in force since 16 January 2023.
What you will learn
- How a tender is scored out of 100: 80/20 up to R50 million, 90/10 above it
- How price points are worked out relative to the lowest acceptable bid
- How the buyer's specific goals add up to 20 or 10 points, and where they are stated
- Why 20 specific-goal points can offset a price gap of up to 25% (about 11% on 90/10)
- A worked example with three bidders, where the cheapest bid does not win
Read the transcript+
Every government tender is a scoreboard. Under the Preferential Procurement Regulations, a tender worth up to fifty million rand is scored out of a hundred. Eighty points for price, and twenty for the specific goals the buyer sets. Above fifty million, the split is ninety ten.
Price points are relative. The lowest acceptable bid gets the full eighty. Every other bid loses points in proportion to how much dearer it is.
Take three bidders. A bids one million rand, the lowest, and scores eighty for price. B bids one million and fifty thousand, five percent higher, so loses four points and scores seventy-six. C bids one million one hundred thousand, ten percent higher, and scores seventy-two.
Now add the specific goals. The buyer must state them in the tender documents, with the points for each. Say A earns none, B earns the full twenty, and C earns ten. B is not the cheapest, but B wins, with ninety-six points, against eighty, and eighty-two.
That is the rule to remember. Twenty points can offset a price gap of up to twenty-five percent on eighty twenty, and about eleven percent on ninety ten. So claim every point you qualify for, and never price below cost just to chase price points.
In the Pricer, every tender shows which system applies, and how many specific-goal points are on offer, right beside your live estimate. Then you can choose a pricing posture that uses them, like undercut with preference.
Know the scoring before you price. Next, we'll look at how to read a tender pack for the requirements that decide the bid.