Tender Price Reference: Budget + Market Rates + Scoring
Determining reference prices for electrical assembly tenders centers on the concept of a “reasonable low price”: first, prepare a budget (based on specifications and market rates), then evaluate bids (using a comprehensive scoring method rather than simply selecting the lowest price).
Industry experts suggest looking at three benchmarks—cost calculated from the specification list, market price ranges, and historical transaction prices—and cross-referencing them to establish a reference price range.
Three Price Reference Benchmarks
- Calculated Specification Price: Costs are calculated item-by-item based on the tender specification list (cabinet type, component brands, technical parameters), with a reasonable profit margin added to form the budget price;
- Market Price Range: Based on industry pricing norms (e.g., 10,000–50,000 RMB/unit for low-voltage cabinets, 50,000–200,000 RMB/unit for high-voltage cabinets, 200,000–800,000 RMB/unit for box-type substations) and market inquiries;
- Historical Transaction Price: Winning bid prices and supplier quotation records from similar projects used to assess price reasonableness.
Bid Evaluation Pricing Strategy
A comprehensive scoring method is recommended for tenders, combining scores for price, technical specifications, qualifications, and past performance.
Price scores should be calculated based on a “benchmark price” (such as the second-lowest bid or the average bid) to prevent the downgrading of specifications after a low-price win. Establishing a maximum price limit and a low-price warning threshold (requiring clarification if the bid is below 80% of the budget) helps prevent predatory low-price bidding.
Industry experience shows that low-price traps in power equipment tenders often stem from “winning with a low bid followed by costly change orders”;
therefore, pricing clauses must clearly define the rules for changes.
Key Points for Preparing Tender Documents
First, ensure the specification list is detailed.
Clearly define cabinet types, component brands, and technical parameters to ensure price comparability.
Second, standardize technical requirements.
Reference national standards (GB/T) and type-testing requirements to prevent any lowering of standards.
Third, ensure price terms are explicit.
Clearly define the scope of the quote to include taxes, transportation, installation, and warranty.
Fourth, ensure transparent scoring rules.
Publicly disclose the weightings for price and technical scores.
Pitfalls to Avoid
First, avoid the “lowest-price-wins” trap.
Winning a bid with an artificially low price often leads to subsequent change orders (added costs) or downgraded specifications;
the comprehensive scoring method offers a more stable approach. Second, beware of “inflated budgets.”
Budgets that are out of touch with market rates should be verified against costs calculated from reference specifications.
Third, avoid “vague standards.”
Unclear technical requirements can result in winning bids that offer low prices but deliver poor quality.
Trends and Reminders
Tendering for power equipment is moving toward digitalization: electronic tendering and big data price analysis (using historical transaction databases) allow for more accurate reference pricing.
For purchasers, the recommended approach is to use three benchmarks—cost calculations based on specifications, market price ranges, and historical transaction data—combined with a comprehensive scoring method for bid evaluation.
Establishing a reference price is like calibrating a measurement;
the price is only reasonable when all three benchmarks align.
