It seems very credible that "Write better software for the US government" is a field that is shockingly underexploited, simply because of the ideological biases and likely background of the typical american start-up entrepreneur.
It seems very credible that this field is "underexploited" for two main reasons.
One is that business dealings with the US government are very stupid, inconvenient, and annoying. You drown in paperwork, you have to certifiy all kinds of silly things, etc. It's OK for a large organization with a compliance department, it's not so good for a startup.
Two is that government contracts are a prime field for crony capitalism. You will be competing not only on price and quality but also on the depth of the old-boy network and the ability to provide invisible kickbacks -- again, not a strength of startups.
.. Are you speaking from personal experience of selling things and services to the government here? Because if the answer to that is "No" you may, possibly, want to check if you remembered to remove those ideological blinders I mentioned. The main point of the paperwork vendors to the state have to do is to make sure that crony capitalism doesn't happen. If the process is very badly designed, that fails, but I've never worked anywhere that found it more obnoxious to do business with the government than with any other large customer. Usually it is less so.. The USG can't be that much worse than the nordic countries. It's still a first world state.
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