Use basic supply and demand economics to combat underbidders.
America's capitalistic, free enterprise society is based on supply and demand. We've all experienced major price increases due to crop failures, citrus grove freezes, shortages of copper, drywall, cement, gasoline, fuel oil, etc. We've also watched prices come down when there has been an abundance of any commodity. That is how simply our business world revolves.
America has one major industry, however, that doesn't always keep pace with the supply and demand business philosophy. Our construction industry is polluted with "Billy Bobs" who willingly pay the fiddler every time one of those shortages jack up the cost of doing business, but they fail to pass on those increases to their customers.