As a project and contracts manager for a company that does federal government work… I can tell you that overruns are quite common.
Here’s a look at a reason, and one of the procurement processes: when the government wants work done, they must advertise it - usually Commerce Business Daily, or via some public method that lets industry know what’s being asked. Interested companies will ask for the RFP - the Request for Proposal.
The RFP details precisely what work the government wants accomplished: run a LAN, build a ship, manage a warehouse. Each interested company responds to the RFP with a proposal, explaining how they would do the work - who they would hire, what tools, processes, and procedures they would use, where they have done similar work successfully before, and how much this all would cost the government.
The feds then evaluate each proposal, making sure that it is minimally complaint – that is, it promises to do at least what they asked for. One evaluation factor is always cost – that is, how much will this company charge us? Since you’re competing with others, you have to keep your cost proposal low, lest someone else win – but you can’t go so low that you’d lose money on the project.
When the contract is awarded, then, there is typically no margin for error downwards. The costs have already been cut to the bone. There is plenty of room for negotiation upwards, though - after all, now that you have been awarded the contract, the government is loathe to fire you and start over, especially if you’re half-way through the work.
So what often happens in federal contractors is a very heightened vigilance on any minor changes requested by the government - any excuse, in other words, to say, “Hey, now you’re asking for something that wasn’t in the RFP - that’s gonna cost you more.”
Sometimes that’s a legitimate gripe - the government will discover it needs more, or different, work than ithe RFP specificed. Other times, it’s more absurd: “Yes, we agreed to produce reports, but you never said you wanted them printed. Here’s the disk - if you want paper copies, we’ll have to ask for a modification to the contract.”
And every modification can be an “overrun.” That’s just the way it is.