While I can't speak to the what the big guys do, the government itself is an enemy of the smaller businesses from what I have seen.
Every government contract I have seen always has the equivalent of "We can cancel this contract and quit paying you money at any time."
That misaligns the incentives immediately.
1) A small company can't commit a significant fraction of its resources and risk getting yanked. Any small company that does is run by an idiot.
2) From the small company perspective, the primary useful goal is to do nothing as long as possible while collecting as much money as possible and deliver as little as possible to fulfill the contract. The ideal outcome is to do nothing and have the government actually yank the money and default on the contract. The secondary outcome is to collect all the money and do all the work in the last month of the contract.
3) The small company will pile everything into change orders and charge the government a fortune up front on those.
The problem here is that those are rational behaviors when the government behaves that way in its contracts.