There would've been an RFP for this, surely? Which means PwC was chosen to deliver this ahead of n number of other tenderers. I'd be curious to see what other proposals there were and the decision-making that went into choosing the winner.
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.
Having worked in large corporates (and some government projects) issuing out RFPs, the final decision tends to go: let's just go with an established name like PwC even if they're more expensive (and given we have the budget approved already) as opposed to a small firm down the road that has a great portfolio, because if something goes wrong, I can say I relied on this big, proven firm, and not be criticized for using an unknown firm for such crucial work.
It's frustrating, because these larger firms most always churn out subpar work and this mindset just keeps funding it so they don't improve.