How is the government incentivized in any way to do that? Politicians in the US receive substantial campaign contributions from established military suppliers who would stand to lose a lot from said laws. I don't see any rallying cries from the public about the competitiveness of supply arrangements government entities currently have.

Basically this is one of those areas where we can expect positive change iff there's a lot of public outcry. Sometimes the political stars align and we get actual reforms, but its not anything that we should expect that politicians would ever get up to on their own.