The newly appointed fix-it czar, Jeffrey Zients, definitely sounds competent from his current remarks (see elsewhere in this topic his top priority), hopefully he can muster enough passion for the Maximum Effort required.
And, yeah, I've done some work for the public sector and it's that bad, sometimes worse. In the last case, an entity had Lockheed make an at least half-bespoke (custom) system, which worked pretty well. Then put out continued maintenance on bid, Lockheed didn't win that contract, and years later, as the DEC Alpha systems were nearing their end of life (the line was of course killed by Compaq/HP), it was discovered the sources Lockheed left behind wouldn't compile into the binaries used (e.g. they used SCCS (!!!) ... until a few months before launch). First by a guy they had to let go after a month or so because of budget screwups, then by me over a year later. But of course the plan and budget was predicated on a doesn't match reality estimate of work to be done by another contractor long before.
Needless to say the clients didn't understand the difference between source and binary code, or how they'd painted themselves into a really difficult to exit corner.
As for failing, CMS in its role as integrator did do integration tests 1, maybe 2 weeks before launch. They of course failed hard.