When I was in a line of work that sold stuff to, inter alia, the MoD, we doubled our price too. And stopped bothering, after a while, because even with that premium it was still uneconomical to do business with that mob.
We were a small outfit, but I know the same to be true elsewhere for much bigger concerns. I knew a senior manager from one company that made radio equipment who said they baled from a major contract because change orders came in so fast and were so badly thought out it was impossible to get any units through production. Didn't matter how much they charged, they simply couldn't do the job.