The USSR did the same thing, but worse. There was one (or at most 3) vendors for not just government stuff, for for everything. Even cars, and household goods. For market efficiency of course.
And the vendor got picked by some government official somewhere, so it was almost always their friends. No worries about having to pick the low bid!
That’s why the waitlist was decades for almost anything anyone actually wanted.
Capitalism is defined as an economic system in which private individuals or businesses own capital goods and operate within in a free market system, not ‘some guy greased the palm of a government official so their business now gets to hoover up people’s personal data.’ Both capitalism and socialism have corruption, moreso in socialist systems.
The correct response to ID.me is to support US Senators who are trying to get rid of ID.me.
I'm as much of a fanboy of capitalism as you can get. BUT, if you can show me a system that works fairly and well with fallible and evil humans that's better, I'm 100% onboard and will go to bat for it.
We just don't have anything like that, and I've lost all hope in humanity. So for now, plain old freedom of association and trade (i.e. capitalism) is what I'll promote.