Back in 2000 the Department of the Navy awarded EDS a nearly-$7-billion, 7-year contract to provide all the Navy's IT data, voice, and video services, plus all desktop and laptop PC's, for 400,000 or so Navy and Marine Corps members. 

Now, I defer to no one as a fan of "privatization" on general principles, but this has evidently been a disaster for both the Navy and EDS.  Some of the problems are attributable to the peculiar delights of government contracting—for example, that the roughly 40% of the work previously done by minority-, women-owned, and otherwise protected subcontractors could not be diminished regardless of productivity gains—but according to this account, the root problem is the toxic mixture generated by the collision between a sloppy RFP and the sales culture of IT service providers.

The "winner's curse" in yet an other incarnation.