This is 100% not correct. The military does this all the time. Soemtimes the incumbent *assumes* they will be a shoe-in, but sometimes they get an ugly suprise.

The way the mil (and presumably other agencies) arrange such things is by structuring the contracts such that it *can* be awarded to a competitor in the future, to avoid the effective monopoly you suggested. .Gov may be dumb, but they're not *that* dumb.

For example, the initial award might be for facilities, hardware, software, and operations. Ops being the staff. But the facilities and hardware might be a purchase (or long-term lease), software indefinite lease with maintenance, and operations fixed term. You can swap out the ops and software independently of each other as needed.

Of interest, it's common for many of the employees to stay across contracts, by simply switching to the new company. I've also seen them not stay, because the new employer didn't want to pay enough... that could be a good thing or a bad thing short term but tends to even out in the long run.

As I've said a couple times already, it has to be structured properly, and it's still going to be as effecient pure private-sector business. But done properly, it's more efficient than .gov doing it with civil servants.