Well, since the government is the one that set up the whole game including how much they would pay for the work, how sub-contractors would be chosen, what methods would be use to ensure accountability and a quality product, etc. -- I think the target of your sarcasm is misplaced.

By the time IBM Federal got the project and could start coding, some bureaucracy of failure had already decided that $33M was a fair price for the specifications that they provided.

I know people who work on government projects like these. I know how the subcontractors are chosen. I can almost guarantee that the subcontractor who received this job had some special "in" with the decision maker on the government side through nepotism, trips to strip clubs, cash payouts, political connections, or something.