The existing contractors definitely don't like it, and on healthcare.gov, we learned to expect zero cooperation (indeed, plenty of interference) from the management of those companies. [1]

But ultimately, the people making the contracting decisions are agencies like CMS, HHS, the VA, and DHS. And with USDS, the agencies now have solid third party to provide technical advice--for example, that a consumer login system shouldn't cost $80 million to develop.

That's why you see results like the one quoted in the article, where a $200m initial healthcare.gov system was replaced with a $4m one. And if you read between the lines, you'll notice that the major federal contractor for healthcare.gov decided not to bid this year: http://www.wsj.com/articles/healthcare-gov-contractor-optum-...

Sometimes the good guys win.

[1] On the other hand, the engineers at those companies generally want to do the right thing, if they are empowered to.