Likely the old cost plus ruse
I remember as a civil servant a vendor that had our procurement department salivating at every word uttered mentioned during some presentation that they would be offering their services at cost plus their markup which was something piddly like 5%.
My alarm bells immediately started ringing and it was obvious they would just inflate their costs.
Anyone that buys expensive tin knows no one pays the list price.
The procurement department contacted the manufacturer of the kit the vendor was selling & got the list price, they then compared the cost plus price and almost wet themselves when they realised they where getting everything for less than the manufacturers list price.
it somehow never occurred to them that they where being conned.
Th vendor got on the preferred vendor list so future sales under x thousands didn't need to go to tender and suddenly loads of sales went their way all at above prices we could have got from a competitive tender.
No one seemed to question the lavish gifts, trips/meetings the procurement department where being taken on.
I left shortly after as I seemed to be the only 1 there that wanted to ensure we spent public money responsibly.