I don't think you're really paying for the development per se.
Most of the effort is actually managing the customer. That is, their contracting requirements, the whole requirements process, procurement hoops, change process, optics management, cost of "sales", reporting requirements, various additional compliance requirements...
This is a large part of the truth. Crank out a booking website? Give me a couple weeks. Deal with your byzantine organization, your incoherent standards, your security department coming out of the woodwork with list of requirements, your torturous system for provisioning government services like VMs in secure data centres... and then pile on that integration with a variety of legacy systems across another slew of organizations that bring all their own baggage to the process.
I would blame government, but I'm simultaneously experiencing all these issues with a Fortune 100 company. They're almost indistinguishable in the degree to which their cumulative organizational headwind is a hurricane I'm supposed to fly into. It's simply hard past a certain scale for purely people and procedure reasons.
And let's not forget that 1/3rd of the way through, when you're demonstrating an impressive amount of progress with a working prototype, some decision maker will say "you know, we could really make this a two-for-one if we tied it into this other program...", and start the 1,000 hours of meetings to get to development all over again.
Most of the effort is actually managing the customer. That is, their contracting requirements, the whole requirements process, procurement hoops, change process, optics management, cost of "sales", reporting requirements, various additional compliance requirements...