Like Jerry Pournelle, I find the idea of a prize or prizes quite appealing. And it would very likely work.

However, tens of thousands of people are currently employed by the space program as it is. Billions of dollars are distributed to hundreds of companies across the nation in the process.

The major flaw with the government "prize" idea--at least as far as the government is concerned--can be found by simply answering the following question:

Exactly how many government employees, vendors in congressional districts, and bureaucrats would be involved in the simple process of offering a prize to the private sector?