I work in this space. There's a wide variety of reasons, a company being dumb and greedy is definitely among them but typically just a tiny part of the equation. The biggest thing is certified vendors. The military/government is incredibly strict with who they'll contract with. Which means the supply is incredibly limited on many things, which in turn means that companies will ratchet up prices a crazy amount in part to deal with the goofy standards that the government requires on their goods but also because they know the demand far outweighs the supply.

There is also the burden of time. The US government drags their feet an INSANE amount on projects. It scales with size as well. The larger the project the slower things move almost every time. It very frequently gets to a point where they need stuff done right now because they waited too long and will pay pretty much any price to do it.

There is also the fact that the military is operating with a budget chalk full of "fuck you money." In short, money is immaterial. Half the time they don't even look at the price, whatever it costs doesn't matter, just get it done and get it done right.

My company marks up shit an insane amount and I know for a fact pretty much every other certified vendor is as well. I dunno about 8k% (lol) markup but honestly that doesn't shock me. The prices I've seen are jaw dropping. And they pretty much never get negotiated or rejected.

It's often the military's own flowed down certification requirements that result in significantly higher costs

Probably because trying to fight the bullshit ends up costing more in the long run.