Sorry. 
I am sure they honestly believe there is no conflict of interests. But because it's such a close-knit group who make these decisions and award the contracts, they are bound to choose someone they know and trust, rather than an outsider. It seems to be a dangerous, self-serving clique who are in charge - most of whom we have never heard of, and certainly never voted for. They influence everything from what food we eat to what sort of view we get from our windows.
It's not fair, I agree, Custardo. But how can you stop it? It's everywhere. I got my first job through someone I knew at uni. That's the reason people send their children to private schools and want them to go to Oxbridge - in order to make the right connections. A plumber would give his best mate a job in his firm rather than go through the advertising, interviewing etc process. And things are no different now from how they have always been, I don't think.