Exactly. VMS probably literally "meets the requirements".
HN dunked all over that agile vs. waterfall article from a few days ago, wondering whether or not waterfall wasn't just some boogeyman that a bunch of consultants had to invent to sell certificates, but I'm here to tell you waterfall is a thing and it's still alive and kicking in the Navy, even now.
That would require the spec to have been written to allow that kind of rejection. I strongly suspect the spec was not written that well.