Dumb policies scare tech giants away from any projects, not just "federal" ones.
The problem lies with the problematic organization, in this case, the federal bodies and agencies of the government. However, we all know government doesn't attract the best and the brightest, it attracts those with the pursuits of low men.
If I had a solution for you I'd share it, but it's a complex problem. Perhaps we can get some scientific studies done on the make up and functioning of politician brains (even if we have to hide it within another study), and then work to adjust those behaviors into roles that benefit our species as a whole.