While a number of companies (including my employer) do a lot of business with national, state, and local government agencies, other companies would just as soon not bother to do so. Because of red tape and low profitability, it's easier for them to do business with non-governmental customers.
And even those whose products are of particular interest to governments may have a hard time selling to the government - or may have a hard time AFTER selling to the government.
Take Alfred Nobel. Some of you may not know Alfred. I don't know that Bob Dylan ever wrote a song about Alfred, but if he did, it would go something like this:
The merchant of death would ride in his train
And sell his poisons to the rich and the old
And the hobos of Europe would follow behind
The whole "merchant of death" thingie arose when Alfred's brother died and a newspaper, thinking that it was Albert who had passed, wrote in an obituary that Alfred made it possible to kill many people very quickly.
One of Albert Nobel's killing inventions was something that he called ballistite. This product, which didn't emit as much smoke as most other products of the time, was something that could be sold in the militarizing Europe of the 1880s.
Since Nobel was living in France at the time, and had lived there for decades, he offered the product to the French government. However, the French were already doing buiness with a French chemist named Paul Vieille who had developed his own non-smoky product, so they didn't want to buy Nobel's invention.
Shut out of his (adopted) home market, Nobel successfully sold the product to the (relatively new) Italian government. After a factory was set up near Turin and 300 tons of ballistite was produced, the Italians asked to purchase the patent itself. Nobel sold it.
As Nobel Media's history of Alfred Nobel states,
These actions did not sit well with France.
So what, one may think. Let's say that Nobel had invented some type of gun, and that he first tried to sell it to Remington. Remington didn't want it, so Nobel sold it to Smith & Wesson. The product takes off, and Remington kicks themselves for missing out on an opportunity.
But things get a little tricky when the losing party is a government, and the winning party is a competing government. And Nobel, living in France, began to have a few problems.
An ugly press campaign aimed at discrediting Nobel was started. Among other things, he was unjustly accused of espionage, threatened with imprisonment, and his license to conduct experiments in France withdrawn.
Nobel left the country for a while, and when he returned to Paris,
...he...took with him all laboratory equipment which had not been confiscated and a few personal possesions, including his mother's portrait, a gouache by Anders Zorn and a part of his library, and moved....
And where did he move?
But he kept his house in Paris, and a few years later he happened to be in Paris when he was making his will. Because that whole "merchant of death" thing had bugged him so, he decided to set up a group of prizes under his name so that he would be remembered for something else. Or, as Bob Dylan would say,
Sweden and Norway are colder than Hibbing
And you wear fancy clothes as the diplomats lie
And the lecturers spin tales of death and of life
Before the reaper bids them goodbye
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