A government contract being underestimated? Color me not surprised.
The reason this happens is people don’t understand estimates.
These are all unique jobs. It isn’t like building. Something again and again.
I would expect that the first estimate is a rough order of magnitude, which is +\- 50%.
Then, when the engineering firms get the requirements, and investigate further, they get a much clearer estimate of the job.
It isn’t that the first estimate was wrong. It just has a large variance.
Now bids come in, and expectation is they got more info.