They know, very very well, that if they screw up the first part, the second part will be undeliverable. Of course, a local council would not know this.

So the blame is entirely on them. That's the job they bid for. They may be cynically doing a bad job on the first part, convincing the local gov that it's their fault, then exploiting that for more time/money.

This seems highly likely.

A newer tech consultancy might not realise that this is the biz they are in; oracle do. You job is business process consultancy using IT.