How to Price a Government Tender (Without Losing Money)
How tender pricing is actually scored in Australia, how to build a cost base that survives late payment, and why the lowest price does not always win.
Watch the walkthrough · 1:33Price a tender with a plan, not a guessSee it done in the real dashboard, with a sample company.Price too high and you lose on points. Price too low and you win a contract that loses you money — or gets queried as abnormally low. Pricing a government tender well is its own skill, and it starts with understanding how price is actually scored.
How price points work
Most approaches to market score price as a stated weighting — commonly 60/40 or 70/30 price/quality — and price is usually scored relative to the other conforming bids. The cheapest conforming bid earns the best price score; others lose price points in proportion to how much higher they are. You are pricing against points, not just against dollars.
Build a cost base that survives reality
- Direct costs: materials, labour, equipment, transport
- Compliance and bid costs: certificates, bonds, the time to prepare
- The finance cost of late payment — if you will wait 60–120 days for cash
- A real margin — not what is left over, but what you set deliberately
Beware the abnormally low bid
Organs of state can query or reject a bid that is abnormally low — priced so far below the others that delivery looks implausible. Winning on a price you cannot deliver at helps no one: you carry the loss, or you fail and damage your record. Price to deliver, not just to win.
Make the bid/no-bid call on the numbers
If the only way to win is to price below your real cost, that is a no-bid. Disciplined pricing — and the discipline to walk away — is what separates contractors who grow from those who win busily and go under quietly.
Frequently asked questions
How are price points calculated on a tender?+
On the price + criteria system, the lowest acceptable bid scores the full 80 price points and others score proportionally less; SME non-price criteria (up to 20) are added on top. Over A$50M it is price + criteria.
Does the lowest price always win a government tender?+
No. Price is combined with SME non-price criteria (and functionality where used), so a higher-priced bid with a better SME level or stronger quality score can win.
What is an abnormally low bid?+
A price so far below the other bids that the buyer doubts you can deliver. Organs of state may query or reject abnormally low bids, so pricing to deliver matters more than simply being cheapest.
Should I include the cost of late payment in my price?+
Yes. If the buyer typically pays in 60–120 days and you will finance delivery, build that finance cost into your price before submitting — not after you win.
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