That's the guy.
Government contacts to private companies are not necessarily inherently wasteful. If they can somehow avoid all the bureaucracy, they can get the job done efficiently. A lot of the unmanned space exploration, such as JPL which is managed by Caltech, a private university, is doing an excellent job overall.
But on the shuttle, NASA is the dog that wags the tail.
Of course, but they type of contract and terms make all the difference in the world. Cost plus contracts generally are bad for larger contracts. One approach that has been advocated for some time has been for the government to offer a prize to whichever entity that can accomplish a stated goal. In this way the government only pays for successes, not failures. It also encourages innovation. It tends to weed out the typical government contractors that are used to generating only paper instead of flying hardware.