Pricing your offer may seem like the most straightforward task you’ll undertake, however there can be potential risks in how you choose to price your response.

Although you understand your costs and how you deliver your product or service, pricing your offer to include as part of a tender can sometimes be more challenging, such as:

• Determining your price over an extended period of time when markets are subject to ongoing change.
• Uncertainty about your business’s share of the total spend when tendering for panel contracts
• The extent to which your price needs to factor in additional risks to your business arising from the contract (e.g. liability provisions)
• Limited opportunities to refine your pricing once the tender closes (except for a Best and Final Offer process) which may leave your bid challenged through the competitive tendering process
• Setting your price too low leaving you in a position of winning the tender, but not delivering a commercial return for your business.

Generally you should put your best price forward first as there may not always be an opportunity to improve your offer through the negotiation process by a Best and Final Offer (BaFO) process. Not putting your best price forward early in the procurement may lead to your bid being discounted from shortlists, as competitor bids may demonstrate superior value for money.