I have first hand experience with this, although in Australia. My first job was working for a IT development and solutions shop (this is over 17 years ago) where they won the bid to rollout the internet and network gateways across a large number of Australian government schools. We were doing similar work for private school at the same time, and the process for the public and private school could not be more differen…
There seems to be something very broken with contracting in the US, which seems more specifically US government operations than government in general. If you look at something where you can compare prices between countries, like per-mile subway construction costs, the U.S. is a huge outlier, with procurement costs much higher than Europe.
The higher-than-Europe comparison I had not heard before. The higher than private industry cost of United States government contracting (and contracting by local units of government when they spend federal funds) is dictated by the Davis-Bacon Act,
http://www.dol.gov/whd/govcontracts/dbra.htm
once we understand that the law's requirement to pay "prevailing wages" means, in that context, to hire union labor even when less expensive nonunion labor is available.