That's called cronyism, and, for the most part, it's either against the law, or will get you destroyed in the media. One of the biggest challenges in government is that, for those of us in startup-land, the process goes something like: "I need to hire someone, I'll call my friend who I know does good work". You can't really do that in the government, or everyone who isn't your friend won't be happy.
The standard federal contracting route is certainly a mess as well. The underlying belief that everything can be reduced to a series of checkboxes, and whoever can check the boxes the cheapest wins leads to a disaster.
Hopefully, one of the outcomes of all of this is we rethink how the government software (and other sorts of procurement) process is done.