Past Experience (Score 1)

A couple of points:

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.