Working at Sun I've heard the higher-ups discuss these grants and awards and from what I gather, despite the award money, it is still very expensive for the company. The award money is not enough to fund a competitive entry. IBM definitely has a lot more money to put into the effort than Sun does. Not defending them though. It's a bummer for the company that they didn't get the grant, but I probably agree that losing could be a good thing. Winning would be great for bragging rights and image.
I really don't know anything.