It's not just the public sector. There are plenty of shady services firms (law and marketing especially) who work the same way. In those areas the only thing th

It's not just the public sector. There are plenty of shady services firms (law and marketing especially) who work the same way. In those areas the only thing that mitigates abuse is essentially firm reputation and goodwill between individuals. It's hard to design a contract that gives the right incentives to the right people. Because the government is essentially banned from using goodwill and reputation as a basis for buying decisions (as it gets called cronyism and/or the old boys network) they are stuck trying and failing to enumerate a fair contract instead.