If governments actually employed most of the development teams who build their services, and cut out most of the private middlemen consultants, managers, sales staff etc

You mean this? They’ve been working on it for a while, this is about adopting stuff they’ve already done.

For example, covid tracking apps

Germany’s is open source. Developed by Telekom and SAP, most of the money didn’t go towards development (it’s simple enough of an app, after all) but infrastructure and end-user support. You can’t just tell random FLOSS people to deal with 80 million DAUs.