Here is the simplest example. Say you need a device that does X. Now, I can go down to the local hardware store and pick up a device that does X (and Y and Z) for $40. But the law is written so that I can't just buy it where I want, because I might be wasteful and I might buy it from my buddy. So instead, I have to put out a bid that says I want a device that can do X and only select whom ever wins a bid. But there are a lot of regulations in who can bid, so the local hardware store doesn't ever even try. So I say I want a device that does X, and I end up getting a couple offers, the best of which is a device that barely does X for $200. That is the best offer I receive, so I have to take it. So now I have a much worse device at a much higher cost. Now, multiply this with every single thing you need to pay for in a software project (including other software, licenses, hardware, manpower, even the paper to print specs on).