Do government services act in the most efficient fashion? Of course not. Is there waste? Certainly.
On the other hand, efficiency and minimized waste and maximized profit are not necessarily what one wants as consumer of a service.
When profit is the motive, the service is curtailed and charges are maximized. Is that what we want for our veterans? Or our elderly? Or our poor?
Privatizing welfare services always sounds like a great idea … if your goal is solely to save money. As opposed to providing service. #ddtb
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Romney’s Trial Balloon For Privatized Veterans Care Explodes | TPM2012
So much for that idea. Mitt Romney is rapidly walking back a proposal to partially privatize VA care after a wave of criticism from Democrats and veterans groups.

Competition and choice give consumers the best options. If the service is bad, change your provider.
Assuming an unlimited number of providers, that's fine advice. For a core service provided, the number of providers is bound to be limited, reducing consumer choice and decreasing consumer satisfaction as the primary factor.
A competitive environment is great for peanut butter. It's awful for national defense. I submit that a core welfare service is closer to the latter than the former.
Or, put another way, a core welfare service should not be a money-making enterprise. Costs need to be controlled as possible, but the core value is service to the consumer, not the shareholder.