I think you didn't read my post.
Or you did.
That's OK. The concepts are not really for you. I've learned over the years that I'm not the one that can explain economics to you in a way you will understand. Suffice it to say that if the State does it better and cheaper, they should do it. If they can't, they shouldn't. That should be the purpose of the bidding process, to see if you can get the service done cheaper.
I read your post. The gist of it is that saving money trumps all. I certainly wouldn't be so brave as to call that "economics", though. Sometimes the bottom line isn't the way to go.
This is one of those cases, as you've been shown time and time again.