My first IT job was with a hosting company that noticed how much the goverment contracts were bloated. They then spent ages trying to become an offical supplier so they could undercut companies charging so much more. Literally, one of the issues they had was that so many people were curious as to how the company could make a profit since the prices were so much lower than all the other contractors like Serco.

We also ended up being in contact with Serco about a tender they had to redo one of the goverment websites. We ended up not getting any work from that because Serco was under pressure to stop outsourcing all their contracts.

Goverment contracts just send lots of money to companies who already have lots of money.