I really do feel the the whole "Must take the lowest bid" rule for government work needs to take into account past performance....your last 5 projects overran by an average 30% so for comparison we will wack 30% onto your bid.
I like the idea, but Crapita are only half the problem here - the other half is the Civil Service, which consider it acceptable to issue half baked invitations to tender, and then award contracts that either don't adequately specify what is needed, and/or they change the requirements after letting the contract.
If (oh happy day!) Crapita went bust, the next public sector contract would go to somebody else, but have a similarly miserable outcome. This will continue until civil servants at the most senior levels are held to account for failures on their watch (and that would include treble blame-share for the grasshopper types, who move every six months in the hope of evading work, responsibility and accountability).