That's $750k for two years, which is paltry when you consider that your average senior engineer salary is likely to be in the range of 150k+ per year because of how much the major players offer and you also don't get funding for Phase III. A small team of engineers and QA will eat up that award quickly. This is without factoring in other things your company needs to navigate the government labyrinth, healthcare and more if you aim for commercialization.

If you and your team are willing to be underpaid relative to other companies and deal with the risk that working on government contracts entails a smaller contracting company might survive for a few years.