The problem is that the contractor doesn't write the RFP or the final contract, the customer does. So if you want that money you sign on the dotted line and hope for the best.

Within the contract there is often flexibility as to how the job gets done. But bottom line is that if you have a stubborn customer who insists on doing things the hard/stupid way, there's not a lot you can do. Maybe you go above their head and try to force a change but that is fraught with risk. The prudent thing to do from a financial standpoint is just put your head down and complete the contract, even if the work is compromised because of the customer you're dealing with. And indeed, that's what happens a lot of the time.

Fortunately more and more parts of government are buying into the agile mindset but there's still a lot of outdated thinking out there.