One case in point, the HUD on the F-16. There were already many mature displays available on the market , many were more mature in design, multicolor, rapid updating etc.
Instead we had to re-invent the wheel and the pilots got a monochrome display. Good but very expensive compared to a commercial equivalents. We also had to go through severl design review cycles and audits that further increased the cost and time line before it made it on the jet.
Yes this is valid, but consider that the “off the shelf” display may not have the same environmental requirements as are required of airborne systems. From semiconductor parts to cables, the military often has tougher operating environments and so cheaper made products cannot be purchased.
Another frequent complaint is the quality inspections that push cost up, On a program I worked on, a test program wa plagued by a series (6) of failure that were all traced back to failures during manufacture. These should have been caught but were not found because the companies had been given permission to reduce inspection staff. When we went back to full inspections, the failures stopped happening.
Finally a third cost increasing issue that is frequently put up as a waste is the requirement for competitive bids. We needed a circuit board that could only be made by one company but we were ordered to go out for bids. Only the one company submitted a bid, but the process took so long that we had to pay for expedited manufacturing. The cost went up twice, once for the procurement cycle, and again for the rapid manufacturing.