I work as an executive at a non-profit, and have worked in other non-profits. With that said, I don't think this makes sense as a non-profit. Primarily, you choose to be a non-profit if you want to get your revenues from donors. They are targeting government, and so unless they thought they could fund their program through governmental grants, it makes more sense as a for-profit where they are bidding on government work.

Keep in mind, a for-profit can have a social good mission and remain aligned to it (See Patagonia for instance).