Is that necessary? If it turns out that their machine isn't 10 times faster than others', that's just their own problem.

Not sure. Did finishing in 1/10th time part of the contract? If not, then it we can think of the '10 times faster' claim to be bullshit which was only meant to win the bid...

There's no advantage to promising more than needed to get the contract, and there's a big disadvantage in that projects universally tend to take too long, whether the tech is 10x better or not.

Based on other transit tunneling projects, even if it just came in on time and on budget, that'd be a huge win.

They're making tunnels in LA. Presumably some results from that were used as part of the proposal.

Isn't it prohibitively expensive to make a tunnel yourself?

Musk has posted video from the tunnel they made themselves.

They're not being paid for the job so why shouldn't they be allowed to try?