Large companies in well established industries sometimes operate with near monopoly power and are only threatened when the entire industry undergoes a long term, permanent change. Most people don't consider such a situation a functioning, healthy market. Healthcare and banking are two great examples of industries whose dynamics tend to result in a small number of powerful entities calling the shots, the former due to legal reasons and the latter due to economies of scale.
Bad software development processes are everywhere. I've seen more than one successful companies that aren't massive corporations futz around and produce garbage. I've also seen highly effective government organizations produce some awesome product.
While I wouldn't call it "awesome" (bit too clunky for that), the Medicare.gov site that CGI Federal is responsible for (don't know if they built it or the recent Plan D shopping and enrollment part) is pretty good, very solid and gets the job done.
