Good people want to work at places with stock options and bonuses for good performance, the government can not offer that. Government is more suited for people interested in management, not pure technical people
Speaking as a technical person who worked for government, one of the most frustrating things was not pay, I am a simple man. What was frustrating was the GARBAGE tech we had to deal with. I'm talking 5+ year old windows versions, crap peripherals and desktops, shitty offices in ugly buildings, super intermittent connections to the data that always go down, throttled data-centers by incompetent SQL pulls (I was guilty of this starting out, too)...the list goes on and on. Compare this to other places, where you can actually code in comfort, can actually solve more problems because you're not constantly derailed or demoralized by government's rusty and slow systems...
2. competent technology managers who can communicate to the suits who are in charge of the budget that these things are needed for a functional quality tech environment
#2 is a much rarer skill than #1, and those people will get paid way more and will have to deal with way less BS working in tech companies than government positions.
I hate to get political, but perhaps some of this is due to certain parties that always want to reduce taxes, or to even pay for collecting those taxes...
The government absolutely could offer competitive incentive packages if the appropriate legislation can be passed.
At some point it will become obvious that software complexity is a national security issue. I feel that point still hasn't arrived, for whatever reason. Perhaps the realization has arrived, but those offering the realization have biased the reports to favor themselves (i.e. Deloitte, et. al.)
Government pay scales probably end up costing them more right now anyway. I would rather hire two software engineers at $250k/yr than ten software engineers at $60k/yr. Because those ten software engineers aren't going to produce anything at all usable.
"U.S. national security increasingly relies on software to execute missions, integrate and collaborate with allies, and manage the defense enterprise. The ability to develop, procure, assure, deploy, and continuously improve software is thus central to national defense."
We already know it's a national security issue. Nothing is done about it.