Most contracting officers in the government are honest. They have to document the hell out of everything they do, know they are subject to serious penalties for wrongdoing, and generally try their best to avoid the appearance of any conflict of interest.
There are always going to be cases like this one but they are actually quite rare.
I applied for a gov contract once... I came in a little lower than the previous 3 year contract... Of course they went with someone 40 percent higher. And they do a crappy job.