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What you say is largely true (in my limited experience).
Going through your list the concept of “partnering” sprung to mind. When this was announced anyone with a CV longer than 3 half-day seminars (which was but a slack handful) knew what was coming. It would be used by MoD as an excuse to dumb down even more, relying on companies to provide the skill sets, lead MoD by the hand through contract negotiations, tell them what is wrong with the specs and so on. As you say, it doesn’t work because they are not a charity.
But I’d argue that many companies don’t “pay any penalties they incur”. Last time I tried to invoke a penalty clause I was told by one of the supine appeasers I mentioned that I must “leave the company (not BAeS, think France) alone or else they won’t make a profit on the job”. Where they were failing was something he thought irrelevant (yes, airworthiness and safety) so I ignored him. He promptly agreed a contract amendment to pay a few million to change the design (so that it complied with regs) when a price of £50k had already been agreed. How was this paid for? A yet-to-be-developed “highly desirable” design feature was sliced off the contract.
I have to say though, that the majority of companies I’ve dealt with (and that runs to hundreds) do not behave in this way. You tend to find it is the big ones. I specifically exclude Westland from this criticism. Nothing but admiration for the way they cope with the way they are treated by MoD.