"If your software uses OSS libraries you need to make their source available, but not the source for the bit you wrote, unless it's modified OSS."
This is false, depending on license. In fact your whole post is false, depending on the license.
The GPL does not allow you to link to libraries without your code also being under GPL.
The LGPL does specifically allow this.
BSD/MIT license lets you do whatever the hell you want.
AGPL requires you to distribute the source even if the program is a hosted service (like a website).
They are all different and all have different rules, and all OSS inclusions and links need to be considered carefully if you wish to use them from closed source code.
I'd also like to say here that the DOD should be *extremely* careful about the circumstances in which they give source or binaries to contractors to work on. They could find that they've given redistribution rights to their entire codebase to the contractor or (if they make them sign away those rights) that they've violated the GPL by imposing a closed/stricter license on top.