Imagine if you were forced to buy all your stuff from the dollar store. Pretty obviously the results would be hit and miss, mostly miss.

Imagine a twist on this: you have to buy from the dollar store, but they dollar store has agreed on a level of quality. They may have a separate back room with only the things you are allowed to buy because that is where items that meet your quality standard are. (They may or may not allow others into that room)

The reality is for big projects quality should always be part of the contract. Use substandard quality materials and the whole contract is void.

> the dollar store has agreed on a level of quality

The problem is that "agree on a level" and "lowest cost" are fundamentally opposite goals which require constant outside monitoring.

Not if you set the correct requirements.

It's not "lowest cost bid" but "lowest cost bid that meets all the requirements". The point is that requirements have to be well specified.

It can be very adversarial very quickly. Whichever way you turn, the public servants need to be very competent, either to direct the project themselves or to specify it very well. There's no free lunch.

The problem is that Germany lacks knowledgeable people in public service.

The underlying assumption is that Waterfall works, which is probably more problematic.

The thing to keep in mind is that it is not a bid if it is determined to be unrealistic. It is imperative that the contracting office understand whether a submission is realistic or not. If they do not perform that basic step, then the project will either fail, or be subject to expensive change orders that will likely inflate the costs and schedule massively.