I've seen some small firms crash and burn too, though. The problem is small firms are easy-come, easy-go; they don't have enough reputation at stake. Not sure what a good solution is.
You could have contracted 5 small firms for £400k each (which, for this project seems frankly seems excessive) and even if a couple failed to deliver you'd have gotten 3 separate products to choose the best quality one from, £148k to legally chase up the firms who failed to deliver, and still had £2 million left over.
I agree a good solution isn't easy to come up with, but the status quo is certainly an outrageously awful one.
There are dozens of "small firms" with plenty of reputation at stake. Or how about a "medium-sized firm". There's quite a few, probably a few hundred-thousand, options inbetween "PWC" and "my mate's nephew studying computer science".
I agree a good solution isn't easy to come up with, but the status quo is certainly an outrageously awful one.