The solution is to pay people only in return for what they deliver, on time.

This would mean letting projects and companies utterly fail when they fail to deliver, but this is considered impossible in the current climate.

How do you determine the value of a "delivery" without a financial metric? Taking a laissez-faire approach doesn't change the need for financialization. At most, it changes some of the evaluated variables.

The contractors only need to worry about the contract price, which we arrive at through a market bidding procedure before the project.

What happens in reality is that contractors offer unrealistic prices to get the contract; and when the project fails they demand more time and money in order to complete. Government officials usually agree in order to save face and avoid public fiascos.

So you're back to square one. If you can't trust contractors to set a reasonable and realistic prices, then a solution should be a metric or set of metrics by which one can assess what is reasonable and realistic.

The whole point is that we don't have to trust contractors if we are willing to let them bear the risk.