The attempt at competition was about options for launch capability. The US government was happy to sustain the prior situation of a few overpriced stagnant prime contractors for a long time - same with defense. It was hard to impossible for anyone else to enter that space and get attention (let alone money) from those making decisions.
Regarding bidding. It is incredibly common for these decisions to be made in a way that rewards friends, family members, donors. The law requires a competitive process but it is often corrupted and only gives the appearance of a working process. The appeals are very expensive and time consuming so a lot of the time, it’s just not worth it. There’s not much you can do unless you’re a large company with lots of money.