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Pricing Tips for Government Tenders

• Retention: Most government contracts retain 10% until project completion. Factor in the cash flow impact of delayed payment on 10% of contract value.
• Payment delays: Government departments typically pay 30-90 days after invoice. Price in a contingency for late payment financing costs.
• Price escalation: For contracts longer than 12 months, include a CPAP (Civil Price Adjustment Provision) or a price escalation clause.
• Provisional sums: Clearly separate fixed-price items from provisional sums to avoid disputes.
• Mobilisation: Include mobilisation costs if applicable - these are often not separately claimed and end up absorbed.
• VAT: Always confirm whether your client is a VAT vendor and whether VAT should be included or excluded in your tender price.