Why don't they just charge a higher price to buyers who don't pay cash now? I understand there is a lot of demand, but this does not compute with me. My spidey senses would be going off.
This works for private buyers, but these gov agencies have a regulation that doesn't allow them to pay in advance ever. The price isn't the issue. So they can only buy from really big firms, who don't have stock right now and aren't flexible.
Sure, but why do all of the smaller firms absolutely need cash right now? If they sell to a government or large entity, payment is all but assured. Even if they have a high discount rate, they can factor that into the price. There's no way they all need the money now to remain in operation.
We are way past discount rates here. Firms without enough cash won't survive. Even if you double or triple the price, it doesn't help if you're out of business when they pay weeks or months later. That's why some kind of financing is needed for larger orders that need like $ 1/4m to 1m in outlay first.