> How exactly do you imagine a government contract working if it's not reviewed before being granted?
This. ESA's grant approval process is, to its credit, usually considerably more focused on technical excellence than handwavy projections and box ticking common in other government grant applications and tenders, and whilst PSS forms may be a PITA, you'd think a company destined to solve the hard physics and unit economics problems of building a viable commercial launch service could figure out how to fill them in when given a EUR160m incentive to do so.
The European Launcher Challenge is based off the NASA COTS programme that originally funded the Falcon 9 (just with less money, because Europe, which is a bigger problem than straw bureaucrats) Don't know why people seem to think SpaceX got that money through NASA's magical genius American foresight anticipating Starlink, as opposed them being impressed with how SpaceX complied with their requests for very detailed milestone based plans (which two companies that failed to make progress also managed...)