I wonder if that is actually part of the contract or a misinterpretation? Heaven only knows who can answer this question with any authority, but we know some CSRs make up rules to justify saying no, could this be the same?

Without verbiage to the contrary, I would think using a company's rate (government or otherwise) when on that company's business should be acceptable, especially when billing that company for the expense. Probably easily resolved if direct billing would be allowed, but an accounting nightmare if not handled properly.