Profit going to capitalist owners who don't do any work is an inefficient allocation, IMO, more than an "inefficient" government.
Government using money to buy capital and then provide services, deadly socialism.
It's always just been about capitalists wanting less competition. That's why they don't want the market to decide and fight for laws to literally outlaw stuff like municipal broadband. If they are so much more efficient, they should be able to offer an equal or better service for the same or better price.
In practice what the "small government" ideology actually does is get rid of these accountability mechanisms and put scammers and corrupt people in charge instead or relabels corruption as the policy through public-private partnerships.
Furthermore, nothing prevents applying these oversights over public-private partnerships (which is just a fancy term for outsourcing). The government decides who gets hired and on what conditions, so it can just enforce transparency requirements.
Those companies that win big pork filled contracts would never have any incentive to get the company to waste tax dollars.
Adding the profit motive in here definitely helps prevent waste