The space companies I work with and around have to ramp up entire sections just to deal with the kind of paperwork and other crap required to contract with someone like NASA. Not just financial crap, but technical crap as well. When I was working on a Gravity Probe B conceptual test payload that was supposed to fly on the Shuttle, I swear that half the work was just making sure the i's were dotted and t's were crossed for the reams of NASA Shuttle requirements.

I know private space companies that would go a long way to have anyone but the government as a customer, but take the money when it's that or go broke.

On a related note, keep in mind that a large part of the government procurement process is not just about the government obtaining a product or service it needs, but about politicians who happen to have service or product providers in their district steering cash and votes around. Whether the product is the best one, or the government is getting the best deal, usually ends up way down at the bottom of the list. This is a truly bi-partisan phenomenon.

Yet another major reason I don't want to convert the health care industry into another "military-industrial complex."