I've worked in and around the defence industry for four years now, and whilst it's clear there are aspects of schmoozing the bosses and the agencies we contract with (all within legal bounds), the majority of work is completed to a high standard, it meets the requirements set forth in the specification and there are huge penalties for it not meeting these requirements, up to and including outright rejection of the order with all costs on us. The idea that inferior power supplies with bowing PCBs are regularly sent to customers because no one wants to redesign them is nonsense - we spend effort on reliability because we will not get future orders, and may get RMAs, if we deliver crap product.
Edit: misspelling