I would guess it's less likely to be this, and more likely to be purchasing rules in place that ask them to by default place bids for private organizations to c

I would guess it's less likely to be this, and more likely to be purchasing rules in place that ask them to by default place bids for private organizations to carry out work to meet specifications, and only bring it in-house under exceptional cases or where the bids are very uncompetitive. These rules often exist as a means of ensuring fairness, as an anti-corruption measure, or to provide enough business to maintain a robust network of private contractors.