Comment by robocat

Maybe a result of cost-plus?

Anywhere where employee hours are getting charged out, a company can increase profits by increasing headcount.

It also seems to happen more indirectly. A contracting company is often motivated to increase red-tape (such as complex and unnecessary health-and-safety, because everyone agrees safety is good). That has a double win: less competition (side effect of complex requirements) and more hours charged (each hour charged increases profits with little risk).