A consistent tender rate card identifies exactly what each price buys: the buyer’s role category, responsibility level, billable unit, permitted delivery location, currency, tax presentation and effective period. Its internal reconciliation also records included costs, realistic billable capacity, margin basis and any allowed annual change. The result is an approved schedule whose rows can be traced into the staffing plan, pricing workbook and contract without changing their meaning.
The same consultant appears at two prices in different worksheets. A daily rate assumes eight hours while the buyer defines a shorter day. The bid promises experienced staff, but its blended price depends on mostly junior delivery. A salary increase enters next year’s cost model without an equivalent permitted price increase. Each cell can look plausible while the rate card as a whole describes work the supplier cannot deliver at the expected margin.
Start with the unit and role definition, then price the work. A low headline rate is not useful if it relies on unavailable people, unbillable time or an increase the contract does not allow. Keep the detailed cost and margin calculation in the protected commercial model unless disclosure is required through an approved route. This guide supplies a reconciliation method, not market-rate advice or authority to change buyer terms.
Role identity
A job title does not define the service being priced
Begin with the buyer’s category identifier, not the supplier’s internal grade. Two employers can use “senior consultant” for different responsibilities. Record the required work, degree of independence, qualifications and experience from the actual tender. Map the proposed delivery role to that definition. If the buyer permits equivalence, retain the basis for it; do not invent equivalence because a cheaper grade would fit the price.
Where SFIA is relevant, its role-profile guidance separates a role’s purpose and responsibility level from the assessment of a particular person. Use that distinction when checking a skills-based tender. A title alone does not demonstrate a person’s capability. Verify any proposed framework mapping against the buyer’s requirements and the genuine framework; do not manufacture skill levels or credentials.
Keep the rate category separate from named-person evidence. A category may be staffed by more than one eligible person, but the contract may restrict substitution or require approval. Conversely, a named expert can possess skills beyond the role being bought. Neither situation automatically changes the billable category. Have delivery confirm that enough suitable people can perform the promised responsibilities during the proposed period.
Create a row identity using category, level, unit, permitted worksite, currency, tax basis and effective dates. Retain the buyer’s original row number alongside it. This is an internal check, not a request to redesign a locked schedule. A second price for the same identity needs an explanation, such as an expressly separate lot or contractual condition. A different spelling of the same role is not an explanation.
| Field | What to record | What it prevents |
|---|---|---|
| Role and level | Buyer category, duties and eligibility requirements | Pricing a junior role against a senior commitment |
| Unit | Hour or defined day, fractions and working window | Treating incompatible quantities as equivalent |
| Worksite | Permitted place or mode of delivery and related inclusions | Using an unavailable low-cost delivery model |
| Money basis | Currency, tax presentation and separately allowed charges | Comparing unlike amounts |
| Period | Start and end dates, contract year and adjustment rule | Applying next year’s price to this year’s work |
| Internal calculation | Cost allocation, billable capacity and approved margin basis | A rate with no recoverable economic explanation |
Units and inclusions
Establish what an hour or day allows you to charge
A day is not automatically eight hours. Read the buyer’s definition and any minimum booking, partial-day, overtime and time-recording provisions. If no conversion is stated, ask through the permitted clarification process before assuming one. Payroll hours, productive hours and invoiceable hours answer different questions. A person can be paid for work that the customer does not allow as a separate charge.
Suppose a fictional schedule explicitly defines a day as 7.5 billable hours and permits proportional hourly conversion. A daily price of 750 currency units then corresponds to 100 per hour. Dividing by eight produces 93.75, which understates that equivalent hourly rate by 6.25%. This example does not establish a standard day or permission to charge fractions; those conditions were deliberately specified for the calculation.
List the costs and activities covered by the rate. Check normal supervision, quality review, equipment, onboarding, handover and travel separately. For US solicitations that include FAR 52.216-31, the provision specifies hourly rates incorporating wages, overhead, general administrative expenses and profit, and asks whose labour the category covers. That is a scoped US requirement, not a universal charging rule. The actual tender determines how its own schedule must be completed.
An included activity still consumes resources. If supervision sits in the hourly cost allocation, do not add the same supervisor’s cost again through a separate management fee in the model. If travel expenses are separately permitted, distinguish the expense from travel time and obtain the required treatment for each. Keep a short inclusion note beside the internal row, with the clause that supports any additional customer charge.
Cost recovery
Divide by supported billable capacity, not convenient hours
Ask finance to define the cost numerator before calculating a rate. It might contain annual employment cost and a specified allocation of delivery and business overhead. The allocation method must match the organisation’s accounting approach and avoid duplicate recovery. The BLS employer-compensation statistics illustrate why salary alone is incomplete: they measure wages and benefits per hour worked. They do not provide a supplier’s customer billing rate.
Build the denominator from the working calendar and evidence about chargeable utilisation. Account for leave, training, internal duties, expected gaps and contract-specific work that cannot be invoiced. Avoid counting the same absence in both the calendar reduction and a later utilisation deduction. If the person supports several customers, reconcile the total capacity and the cost allocated across them. One employee cannot supply a full annual allocation independently to each bid.
In the fictional Alder team, the approved annual cost allocated to one role is 108,000 currency units. The model supports 1,350 billable hours, making cost per billable hour 80. A target margin of 20% of revenue requires 80 / (1 - 0.20) = 100 per hour. Adding 20% to cost instead gives 96 and a margin of 16.67%. These are illustrative targets, not recommended margins, and include only the costs expressly covered by this example.
Test capacity before accepting the result. If the same annual cost must be recovered from 1,200 billable hours, cost rises to 90 per hour. Keeping the price at 100 leaves a 10% margin on that cost basis. A buyer’s evaluation quantity of 2,000 hours does not fix this shortage: it may be a comparison scenario, not guaranteed demand, and may require more than one person. Reconcile staffing capacity, expected orders and contractual commitments without treating them as interchangeable.
| Case | Billable hours | Cost per hour | Price per hour | Margin on revenue |
|---|---|---|---|---|
| Base capacity, 20% margin target | 1,350 | 80 | 100 | 20.00% |
| Same capacity, mistaken 20% markup | 1,350 | 80 | 96 | 16.67% |
| Lower capacity, unchanged price | 1,200 | 90 | 100 | 10.00% |
| Lower capacity, theoretical 20% margin price | 1,200 | 90 | 112.50 | 20.00%; not an authorised price increase |
Location and years
Every price period needs a matching delivery-cost period
Location changes more than salary. A client-site role can require travel, access preparation or specific equipment; remote delivery can still require an approved country, secure facilities or customer permissions. Do not assume that a remote rate allows delivery from anywhere. Price the permitted model and keep unapproved alternatives out of the submitted base. If the buyer asks for several locations, retain their definitions rather than collapsing them into one cheap average.
Write actual effective dates beside contract-year labels. “Year two” could mean the second anniversary period, a calendar year or a period defined elsewhere. Check what happens when mobilisation starts late or an order crosses an anniversary. The price applying to an order, a day of work or an invoice may be determined differently by the contract. Do not select the most favourable interpretation without resolving the clause.
Separate predetermined annual prices from an indexation formula and from a fixed price throughout the term. The UK Sourcing Playbook connects index selection to underlying cost drivers, but the bidder must follow the mechanism in its own tender. For this rate card, record the permitted rule and its effective dates; use the separate indexation review for the detailed formula test. A forecast salary increase is a cost assumption, not a contractual right.
Consider a fictional role costing 80 per hour in year one and 84 in year two, with 100 billable as the customer price in each year under the stated fixed-rate contract. Margin falls from 20% to 16%. A theoretical price of 105 would restore 20%, but cannot replace the fixed rate without permitted change. Conversely, if a supplier quote already contains the next year’s increase, adding the same escalation again overstates cost. Match each value to its own period before comparing the columns.
| Difference | Evidence needed | Treatment when unresolved |
|---|---|---|
| Client site versus remote | Permitted delivery model and cost inclusions | Do not price an unapproved location as the base |
| Year-one versus year-two rate | Effective dates and authorised price mechanism | Keep cost exposure visible; do not invent escalation |
| Subcontractor versus employee | Valid category fit, quote period and covered activities | Resolve eligibility and missing cost before approval |
| Order spans a price boundary | Clause specifying which rate applies to which work | Request interpretation through the allowed route |
| Same row across lots | Lot-specific terms or an explicitly common rate | Explain the difference or correct the inconsistent value |
Staffing mix
A blended rate carries the risk of who does the work
First establish whether the buyer permits or requires a blended rate. If the schedule requests separate categories, replacing them with an average can conceal the information being evaluated. If one rate is allowed, state internally which roles it covers and the hours used as weights. An arithmetic average of role prices assumes equal hours. It does not represent a delivery plan with a different mix.
In a separate fictional example, an analyst costs 60 and has a role price of 80 per hour; a lead costs 100 and has a role price of 140. A planned mix of 75% analyst hours and 25% lead hours gives a weighted role price of 95 and weighted cost of 70. If 95 becomes the fixed blended customer rate, the modelled margin is 25 / 95 = 26.32%. All costs for this example are contained in those two hourly amounts.
Now keep the total hours and customer rate unchanged, but require 60% lead hours and 40% analyst hours. Weighted cost becomes 84, leaving 11 per hour and an 11.58% margin at the blended price of 95. Charging the original separate role prices for this changed mix would instead average 116. That 116 is a comparison, not permission to abandon the agreed blended rate. The difference exposes the staffing risk hidden by the original average.
Have delivery explain who controls the mix. The customer may legitimately need more specialist work than the tender’s evaluation scenario suggests. Junior staff cannot replace required experts merely to preserve margin. Test an adverse but credible mix, substitution restrictions and supervisor capacity. A minimum volume, mix band or price-reset condition only reduces the contractual exposure if it is actually permitted and agreed; an internal spreadsheet note does not create that protection.
| Staffing case | Analyst / lead hours | Weighted cost | Revenue per hour | Margin |
|---|---|---|---|---|
| Planned delivery mix | 75% / 25% | 70 | 95 | 26.32% |
| More specialist work | 40% / 60% | 84 | 95 | 11.58% |
| Separate-role price comparison for changed mix | 40% / 60% | 84 | 116 | 27.59%; comparison only, not the blended contract |
External references
Do not mistake a ceiling or salary for the price of this job
Label each external observation before using it: employee salary, employer compensation, advertised supplier price, awarded ceiling or evidenced order-level charge. These are different measurements. A wage statistic cannot validate a customer rate without the missing cost and commercial assumptions. A published maximum does not prove that customers usually pay it. Record what the evidence can answer and discard comparisons that require unsupported conversions.
The GSA CALC+ guide describes its MAS hourly data as ceiling prices, not exact estimates for a particular order. Its filters include experience, worksite and contract year. Use a relevant selection and inspect the underlying price list when drawing a US schedule comparison. Do not present its displayed average as a universal market price or an observed transaction price.
For other sources, retain the role definition, qualifications, unit, inclusions, currency, geography, effective date and any volume condition. A twelve-month-old quote may remain contractually valid, while a newly crawled page may contain an old price. The retrieval date is not the effective date. Where a comparison crosses currencies or taxes, preserve the original observation and make the normalisation explicit without implying that it changes what the supplier may charge.
Benchmarking should prompt an investigation, not override the cost model. A lower observed rate may reflect a narrower role, different overhead, a ceiling discount or another commercial structure. Identify the material difference before calling your price uncompetitive. Use authorised public or properly shared information; do not seek confidential competitor prices. The approval should state both the useful comparison and the uncertainty it leaves.
Final reconciliation
Check the row meaning before checking the spreadsheet total
Compare the completed schedule against the buyer’s category list and proposed staffing plan. Look for required roles without prices, prices without eligible staff, overlapping effective dates and duplicate identities with conflicting amounts. Check any contractual ceiling separately from internal targets. A missing price is not zero, and “included” is not a substitute for a required numeric answer unless the instructions permit that response.
Recalculate hourly and daily equivalents only where conversion is authorised. Trace a sample of rows through each year and worksite into the tender’s evaluation calculation. Confirm that the quantity multiplied by the rate uses the same unit. Then test the pricing workbook mechanically for formula and rounding errors. Semantic consistency and spreadsheet correctness are separate checks; passing one does not establish the other.
Obtain delivery approval for role availability and the feasible mix, and finance or commercial approval for cost allocation, margin and downside. Record unresolved assumptions with an owner and a decision deadline. A material unknown about the chargeable unit or allowed increase should not disappear into a generic risk allowance. Use the permitted clarification route, a reviewed compliant treatment or an explicit decision not to proceed.
Release a buyer-facing schedule containing only the requested commercial information. Keep individual compensation, supplier quotations and detailed margin calculations in appropriately restricted working records unless authorised disclosure is required. Retain the submitted version with its role map and effective-date rules for mobilisation. When delivery later asks which category to invoice, the answer should come from that approved schedule and the contract, not from reconstructing the bid model.
What good looks like
Useful outcomes from build a tender rate card
- Each rate has one unambiguous role, unit, location and effective period.
- The proposed staffing plan meets the category definitions used for pricing.
- Billable capacity and buyer evaluation quantities remain separate assumptions.
- Annual prices and annual delivery costs are compared on matching dates.
- A blended price has a documented mix test and an approved downside.
Operating model
How to run the work
- 01
Extract the buyer’s rate definitions
Read the role descriptions, price schedule and charging clauses together. Preserve category identifiers and distinguish mandatory definitions from fields the bidder may propose.
- 02
Specify the chargeable unit
Record hour or day, day length if defined, permitted fractions, location, working window, currency, tax basis and inclusions. Flag unresolved terms before converting any rate.
- 03
Reconcile cost and billable capacity
Use finance-approved cost allocation and evidenced available hours. Count paid leave, internal work and other non-billable time once. Do not replace realistic capacity with the buyer’s evaluation volume.
- 04
Test role and year economics
Calculate the stated margin on the relevant cost basis. Match every price period to its cost period and permitted increase. Test a less favourable staffing mix if one rate covers several grades.
- 05
Check reference rates for comparability
Classify external observations as salaries, employer compensation, supplier prices or ceilings. Record scope, worksite, currency and date; exclude observations that cannot answer the intended comparison.
- 06
Approve and transfer the schedule
Resolve duplicate keys, missing categories and unexplained differences. Obtain staffing and commercial approval, transfer only the required information to the buyer’s format and preserve the approved version for contract delivery.
Evaluation
Questions that change the decision
- Which responsibilities and qualifications distinguish adjacent role levels?
- What activity and duration make one billable unit?
- Which costs are inside the rate, outside it or not recoverable?
- How many supported billable hours recover the allocated annual cost?
- Can each future price actually take effect under the proposed contract?
- Who accepts the exposure if a fixed blended rate meets a more expensive team mix?
Failure modes
Where teams lose control
A familiar job title is treated as proof of the buyer’s required skill level.
A paid working day is assumed to be an entirely billable day.
Overhead or supervision is included in both hourly cost and a separate fee.
A percentage added to cost is labelled as the same percentage of revenue.
An unapproved remote location is used to justify the cheapest rate.
A future cost increase is confused with permission to raise the customer price.
A fixed blended price is approved using a staffing mix that delivery cannot maintain.
Measurement
Measure the finished job
Measure the completed workflow, including review effort and exceptions. Output volume on its own is not evidence of a better process.
- Rate rows with complete role, unit, location and period definitions
- Unresolved differences between staffing categories and pricing categories
- Cost per billable hour under base and lower-utilisation assumptions
- Margin by role and year on the stated cost basis
- Blended-rate margin under the approved adverse staffing mix
Questions
Common questions
What belongs in a tender rate card?
Identify the buyer’s role category and level, billable unit, permitted delivery location, currency, tax presentation, effective period and price. Keep supporting cost allocation, capacity, margin and inclusion checks in the internal reconciliation, disclosing them only where required through an approved process.
Can I convert a day rate by dividing it by eight?
Only if the applicable terms establish an eight-hour day and permit that conversion. Check day length, partial-day charging and working windows. If these are not defined, resolve the ambiguity before claiming that daily and hourly prices are equivalent.
Is a 20% markup the same as a 20% margin?
No. Markup divides the price-minus-cost difference by cost; margin divides it by revenue. With cost of 80, a 20% markup gives a price of 96 and a 16.67% margin. A 20% margin requires a price of 100. State which costs the calculation includes.
Can evaluation hours be used as guaranteed billable capacity?
Do not assume that. Evaluation quantities may exist only to compare offers. Check contractual commitments and model realistic available staff hours separately. If an evaluation scenario exceeds one person’s capacity, reflect the resources needed without treating the scenario as an order promise.
When is a blended hourly rate defensible?
When the tender permits it, the covered roles and assumed hour mix are clear, and the delivery and commercial teams approve the resulting exposure. Test a credible shift towards more expensive roles. An internal mix assumption does not bind the customer or allow unsuitable substitutions.
Should a lower external rate force a price reduction?
No. First check whether it covers the same work, skills and obligations. The difference may reveal a costing error or a different service. Investigate the cause and commercial consequences before changing the offer. Do not remove required work merely to match an observed number.
Can next year’s salary increase be added to the rate automatically?
Only an applicable price mechanism can permit an increase. Compare future costs with the fixed annual prices or adjustment rule actually offered. If the contract keeps the rate unchanged, show the margin impact internally and obtain approval; a forecast alone does not authorise a higher invoice.
Sources
Primary references
- Commercial time-and-materials proposal requirements, FAR 52.216-31 U.S. Federal Acquisition Regulation
- CALC+ hourly labour ceiling rates user guide U.S. General Services Administration
- Building SFIA-based role profiles SFIA Foundation
- Employer compensation costs: technical note U.S. Bureau of Labor Statistics
- Sourcing Playbook: cost drivers and indexation UK Cabinet Office
About the author
Tony Kim
Tony writes about applied AI, dependable product engineering and the systems that turn complex response work into controlled delivery.
Zelius
Managed tender intelligence and bid execution for teams that want the commercial outcome.
Suppliers, founders and commercial teams pursuing public or private opportunities. Start with the workflow, constraints and evidence you already have.