On one job we BEGGED the Gov't to make the contract be completely T&M, but nope, they said "do this stuff for a firm fixed price and we'll handle changes as T&M." The PM wanted to be T&M but the Contracting shop insisted there be FFP to "minimize risk to the government".
So, we put out our FFP bid for about $5M, being very specific in our response where the Gov't had been vague (to minimize our risk). We also specified a formal change order process where any change or out-of-scope work would generate a $2500 flat fee which covered the cost of analyzing the change and providing the schedule/cost impacts and LOE and SOW for the T&M work. The PM actually liked that provision, because he could tell the folks requesting the change "it's gonna cost you $2500 just to look at this, are you SURE you need it?".
$1M in change fees (400 changes later) at the end of the year, they'd spent $4M in T&M in addition to the $5M in FFP, for a total of $10M. We could have done it ALL under T&M for $5.5M. All that waste because the Contract shop didn't want to listen to the PM (who actually knew when T&M was appropriate and when FFP is).
So sometimes you can't even blame the PMs.
In general, at least down at the "working" level of the contractors (PMs, managers, techies) I haven't found any real desire to "screw" the government. Even higher up the attitude seems to be "Well, SOMEBODY's gonna make a lot of money off this horrible process, it might as well be us." With that said, I've never worked in the Defense sector, only the Civilian Agencies side, so DoD contracting might be a whole different story.