In truth the politicians and bureaucrats have always been complicit in this fraud and willing to look the other way in exchange for bribes and kickbacks. They're just better at covering it up and preventing investigations of themselves.
This comes from New York government. They want to get the job "done" with as little money as possible.
I vaguely remember a quote from a governor who says "The government should not be in the business of developing mobile apps." (I can't find the exact quote right now.) I don't know what happened after that, but you can imagine these things could happen if you replace in-house developers with outsourced work.