If the facts are disturbing, I would agree some major changes should be made. But don't be shocked to learn that it's part of a pattern that's gone on in government procurement for most of the last century and is nothing new to this administration. There's a whole system for recusing members of the administration when dealing with issues that might cause conflicts. Is it inadequate? Do you really have the facts? Work to change it.
People move into industry when their party is not in power. On both sides of the isle. The only ones who don't are career politicians who take on party positions. The thought of the whole government being given over to people who have done nothing but be politicians isn't very appealing to most of the country. Is that what you want?
If you decide to exclude anyone who has any business experience with a company that does business the US government, you're excluding the vast majority of people who are competent to serve. Not that long ago, during the last administration, there was a minor uproar about the demands of government service, the massive pay cuts, the constant attention to one's personal life. No surprise people were refusing to serve. Now we don't want them even if there's no credible evidence they've done anything wrong?
At least this represents a major change in the history of the US in one respect. It is universally agreed that the Vice Presidency "isn't worth a pitcher of warm spit". Now Cheney in and is able to influence military procurements. Amazing. Of course he's not doing a very good job of it, since Halliburton's winning about as many contracts of the same types as it always has. How does that square with your facts?