What does the term "buying-in" refer to in government contracting?

The term "buying-in" in government contracting specifically refers to the practice where a contractor offers lower prices in their bids to win contracts, often below their actual costs. This strategy aims to underbid competitors to secure the contract, with the expectation that they will recover costs through additional work, overruns, or changes in the contract terms over time.

This practice can be risky for contractors, as it may lead to financial loss if the prices do not cover the true costs of performance. However, it can also enable contractors to gain a foothold in a competitive marketplace, set the stage for future opportunities, and establish relationships with government entities. Understanding this concept is crucial for contractors and procurement officials alike, as it can influence bidding strategies and contract negotiations.

The other options describe activities that do not fit the specific definition of "buying-in." Submitting a competitive bid is a straightforward response to a contract opportunity, while negotiating after contract award involves discussions that occur post-selection. Establishing long-term partnerships focuses more on strategic relationships rather than pricing strategies for immediate contract wins.