They should focus on not having to charge hundreds of thousands on their product.
I think there could be a lot of potential for PSIM featuresets in large enterprise accounts, Fortune 1000, and so forth beyond government.
By focusing heavily on the government sector you can get lulled into believing your product is worth $100,000 for a basic install when comparably the code is not much more complex than a $20,000 software offering. If you build for government, you'll end up pricing yourself into a corner. Not to mention have a fairly limited market base with a long, complex sales cycle.
Build for large private sector enterprises and you can still charge a lot, but you have a much wider audience, and haven't eliminated the government sector.
Overall their biggest problem might simply be that nobody knows exactly what a PSIM is or does.