Surely the simplest thing todo is what most businesses do......build in fines for not producing on time, Im amazed this has never been done and only release money when targets are met throughout the project.
The problem is that the company often supplies exactly what the MoD wanted... even though what the MoD wanted was not what it needed.
Time to introduce 'sudden death' to IPTs. Mess up and you're fired. Would reduce the headcount a bit.