[HWR_14]

There are a lot of things within (2) that are still reasonable.

For instance, the contracting officer may have to fill out one form for a $500,000 project that they can approve, but approving any kind of different payment terms requires more levels of approval. Sure, it doesn't make sense in this instance, but maybe the rule makes a lot of sense with a far bigger contractor. As the OP said, they are a blip. Making rules that work well for 95% of the time and end up doubling the cost of the 5% is rational.

More options:

3) There are tax advantages to higher costs of services and lower costs of debt servicing that make it advantageous to pay more for a good with better terms.

4) It's literally not worth the time to optimize. They planned for this cost and it's a blip so who cares if it's double the cost. I mean, someone should care, but who actually gets the benefit. Think about it like not cancelling a subscription or not renegotiating every time a contract is up in personal life.