VFR,
You most likely correct that they were using a electronic program that was not listed in their manuals. However, it may have been required by the customer. When you deal with government agencies they tend to want you to use their programs. If that was the case and with the aircraft under public use, the FAA really doesn't have too much of a leg to stand on. The FAA has a habit of throwing as much dirt at the operator as they can, even if they have to manufacture the dirt and see how much actually sticks.
The FAA's track record on major revocations like this is not that good.