Wow, when reading stuff like, I sometimes wonder if I'm not wasting time putting all my efforts into web apps, etc. Find a few deals like this, hire someone to maintain them, profit.
Of course, I'd probably hate every second of it, but still.
A friend of mine likes to tell the story of him discussing a technology idea with a business-owner friend of his. The reaction of the businesss guy was "you know, I see all these tech guys building these grand online empires that never make them a dime. Meanwhile, Town Hall has a contract out for $100,000/year to vacuum the floors and scrub toilets and no one is bidding on it!" Just something to think about :-)
That said, a lot of it is hard to get into. The list of company requirements for non-special bids is pretty long, and that's BEFORE you get into exclusive work that only 8A, Disabled-Veteran-Owned or Minority-Owned businesses can bid on.
It's harder to get a government contract than it is to get a government job (read Federal Wasteland [http://federalwasteland.blogspot.com/]) for more on that.
If you're really interested, it's probably easiest to find a prime contractor that regularly does business with the government and sub-contract to them.
Of course, I'm speaking of federal contracts, and all my experience is with IT. If you're really wanting to clean floors at your local town hall, it's probably outside the scope of what I know.
I'm finding this amongst even startups I think are darn useful. It's just hard to get noticed anymore.
Everyone's (ie; the investors) are just looking for "disruptive technology", the next google, et al.