Government employees are "incentive-neutral", as they aren't rewarded or held accountable for what they do. In an ideal world this could change (better rewards, pride in public service), but that's a whole other story.

But consultants have negative incentives, as they are specifically rewarded for not getting things done, not spending efficiently, asking for more funding - that wasted money ends up back in their own hands.

Yea, you could argue that because of corruption, connections, bribes, the government employees have those same negative incentives. But that's why honing in on outsourcing could be an approach to fixing these problems. Make it harder to sign these contracts, and easier to hire full time staff.