The people in charge assume that a large scale project requires lots of work to implement in all cases. That is not a given. Creating software that runs 10,000 separate instances is a lot easier than something that has to scale to one instance 10,000 times the size.. There is a bias to 1) assuming the former is what you need and 2) budgeting for the former and 3) preferring the former.

Governments are used to funding a lot of things like transport and the military etc. where costs roughly scale linearly if you are lucky. Usually worse because big projects are so hard to manage and require extra layers of management. If you are really lucky there will be economies of scale.

The people able to bid for big national contracts are also going to be big consultancies who are biased to big and complex projects. For one thing they also have to be able to deploy and support it. maybe if development was separated from deployment and support, it would be better?

There have been multiple examples of things such as smallish government websites (I mean small information sites - the sort of things a freelancer could do) costing millions because its done through a big consultancy.