[johnnycab]

>Obviously, there's a complex set of problems and incentives at work here. For one thing, these contractors are often paid by the hour - so they make more money if a project is late or unreliable.

You are right about a complex relationship with numerous contractual obligations and SLA's etc. in place; usually loaded in favour of the big contractors, but it is extremely rare for them to be paid by the hour. They might parachute individuals or a team of IT contractors/consultants and pay them on a hourly basis, to clean up some mess or cover up their ineptitude and provide a level of plausible deniability, which almost always involves political machinations.