Were there any local laws that require the contract to be awarded to the cheaper/better provider, even if there are local companies?
Governments are always pressured to take the lowest bid, regardless of whether that bid is realistic, and regardless of how often it blows up in their faces.
If you want continuous music streaming (that is, it’s not on-demand, and you’ll listen to whatever’s playing), Stingray Music (formerly Galaxie) gets the job done.
I also use CBC Listen, primarily to stream their radio stations, but they’ve got loads of podcasts and music playlists as well.