Often1

Bear in mind that the terms of so-called "government rates" are determined by the property/chain rather than with airfares and the like which are negotiated with and then established by GSA schedule.

"Federal government employees" means employees. It doesn't mean contractors. Some rates will include contractors and some properties will have a separate rate for contractors. Same thing for state & local employees. It may also be that the federal contractor rate is the same as the state employee rate. And it may be that some some rates are for employees of certain states only and may or may not include entities such as the state university system.

All this means is that a property has set its rate either at or below the GSA-established reimbursement rate for federal employees. In some instances, the federal employee rate may be above the GSA reimbursement rate and that leaves the employee the option of sucking it up or seeking approval for a rate above the per diem.

Clearly with the economy improving and more business travel, properties are cracking down because it costs them money. No different than any other unauthorized discount.