Earlier quoted context omitted.
Thats why it should be done like darpa, choosing the best in the end.
Yes, selection should happen after the fact. Build at least an MVP with all critical functionality implemented in working stages. Then use that for the competition to get the contract. Preselection is hot garbage, as proven time and time again. Of course mechanism to mitigate the upfront cost of participating in such a competition should be implemented but in the end it should turn out cheaper/more worthwhile since a…
And anyway most costs are incurred during the lifetime of the project, after you proved yours is the best solution, with endless change requests, delays that require additional money, etc. The companies bidding usually have far more experience at syphoning money than the client has at holding on to it.