3.Value of the project to the contractor. There may be situations in which the contractor is willing to live with a tight or low price. For example, if the contractor has few other projects, it may need to lay off workers unless new contracts are obtained. In such a case, the contractor may include a smaller than normal profit to increase the chances of winning the contract and avoid having to lay off people. Another example of a project that may be particularly valuable to the contractor is a project that provides an opportunity to extend capabilities or expand into new types of projects. For example, a building contractor who has been doing only remodeling projects may want to get into building complete houses and be willing to make a smaller profit in order to gain entry into the market and establish a reputation.