Buyers believe they know what a job should cost to have done properly. If your bid is too far from that belief (lower *or* higher), they'll be suspicious. They're going to spend their money on something in their comfort zone.
The other costs they're comparing is the cost of failure. How much does it cost them (opportunity cost, wasted time, extra money) if they have to rebid the contract in 6 weeks because the job wasn't done (or wasn't done correctly). That's a "competitor" you may not have considered.
Also, don't forget that at the time (mid to late 80's) the USSR had Mir (peace), so we had to put up Space Station Freedom (aka, the ISS). Now, there's no more USSR, no more Mir and *surprise* the budget starts getting cut.
At the time when ISS was approved I took an informal poll in the NASA area and found that, to a person, NASA contractors (I was one at the time) thought the ISS was a *bad* idea and people not attached to NASA thought the ISS was a *good* idea.
The ISS was always about politics. So, until terrorists start putting up space stations, don't expect the ISS to get much budget.
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Buyers believe they know what a job should cost to have done properly. If your bid is too far from that belief (lower *or* higher), they'll be suspicious. They're going to spend their money on something in their comfort zone.
The other costs they're comparing is the cost of failure. How much does it cost them (opportunity cost, wasted time, extra money) if they have to rebid the contract in 6 weeks because the job wasn't done (or wasn't done correctly). That's a "competitor" you may not have considered.
At the time when ISS was approved I took an informal poll in the NASA area and found that, to a person, NASA contractors (I was one at the time) thought the ISS was a *bad* idea and people not attached to NASA thought the ISS was a *good* idea.
The ISS was always about politics. So, until terrorists start putting up space stations, don't expect the ISS to get much budget.