yeah just look at BAE!
why buy a jet fighter that fits the spec and costs very little to buy and maintain when you can have an English company (that is owned by other countries, gets most of the parts from other countries etc) make it for 10x the price and charge 100x the fees to support it?
BAE operates in a free market, it's just that it operates in a market where a UK based manufacturing capability is usually given a heavy weighting on the balanced scorecard. Lockheed Martin, Thales and EADS (to name a few) all have UK manufacturing bases because they are basically requirements to get UK defence contracts. That's not to say that there aren't problems in defence industry procurement however, but you won't fix it by buying stuff from abroad and throwing the baby out with the bathwater.