It does seem totally ridiculous, but I think in many cases governments bring these things on themselves with highly complicated tender processes and red-tape (many time in the name of due-process, fairness and transparency)

Imagine putting a bid for this work. Do you think most of the effort is in building the website itself, or dealing with so many bureaucrats, forms, approvals and so on? Making sure your developers have X certification and your office is compliant with Y regulation, and that all your processes are ISO certified and so on... This stuff costs money, and quite a lot.

So any sane company who wishes to enter into business with any government organization usually take these substantial extra costs into account, which ends up inflating the price. The sad thing of course is that it's the citizens who end up footing the bill.

EDIT to clarify: I am not trying to say that the price makes sense in this particular case. I'm talking more about the general problem with govt-related contracts.