US cities pay too much for buses

"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder."

Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing.

Kinda like how expensive healthcare is since it is paid for by insurance.

Or how you don't care how much you put on your plate or what you choose to eat at an all you can eat buffet.

The second you detach the consumer from the price of something, even through an intermediary such as health insurance, that is when they stop caring about how much something costs, and so the price jumps.

Shouldn't insurance care about the pricing though? I get why federal govt isn't sensitive, given 0 competition.

Insurance profit is limited to a percentage of what they pay out. So the more they pay, the more money they make.

Oh, that's important info. Also such a rule suggests that health insurance isn't a competitive market.

There's no such thing as a “competitive market” in the real world.

Yes there is.

You first have to agree on a definition of free in this context. When Adam Smith was writing the Wealth of Nations most of the transactions in the market were between entities with more or less comparable power. Local people bought stuff from local suppliers. This is very much not the case any more when it comes to transactions involving private individuals on one side and corporations on the other.