What term describes a contractor submitting an offer below anticipated costs with the expectation of recovering losses later?

The term that describes a contractor submitting an offer below anticipated costs with the expectation of recovering losses later is known as "buying-in." In this context, buying-in refers to a strategic pricing approach where a contractor intentionally quotes a lower price to secure the contract, often with the plan of making up for the discrepancy through negotiations or by adding change orders later in the project. This practice can be risky and may lead to financial difficulties if anticipated recovery mechanisms do not materialize.

Underbidding is a broader term that simply indicates bidding lower than competitors, but it does not necessarily imply the intention of recovering losses afterward. Lowballing is often used interchangeably with underbidding, but can carry a connotation of deceit or a lack of seriousness about the project, which does not convey the intention behind buying-in. Contracting out refers to hiring another party to conduct a service, which is unrelated to the pricing strategy in question. Thus, buying-in specifically encapsulates the scenario where a contractor hopes to recover losses after initially submitting a losing bid.