I'm sure there's more to the story than that. Did the musician assign the copyright of his songs to a recording company? If so, then I'm sure he was monetarily compensated for doing so when he signed that agreement and understood that they were no longer "his" songs. And did the ASCAP have some sort of agreement with the bar that the owners were to ensure that no unauthorized performances were conducted?
I'm not saying that these terms weren't laughably restrictive and counter to free culture. But the situation likely boils down a contract dispute--one that was entered into freely by all parties involved. If that's the case, there's enough blame to be spread around for agreeing to such terms. The ASCAP would not have had standing to sue if some random songwriter was performing in some random bar.
See, government contracting works like this. You create a company, hire some folk to work on a contract. Whatever their salary is, you charge the government +50% or more, so essentially the government is not only flat out paying your salary but also the company for your services. If the contract ends, so does your job as the company may not want to charge overhead. In contrast to other business sectors, employment typically isn't grounded so harshly on the existence of a contract, which is where cost of business and business management can keep workers afloat even during down times (think department store).
I do a lot of business with both the federal gov't and private sector businesses on IT projects. You've over-simplified things to the point of painting an inaccurate picture. Federal contracting is extremely complex and there are myriad types of contracts that can be awarded, each with different terms. It sounds like what you're describing is a labor-hour contract. The contractor bills the gov't for the "fully burdened cost" of putting a warm butt in a seat. This includes the worker's salary, overhead, G&A (general & administrative), and profit. All together, it's typically a lot more than a 50% markup of the staff's straight salary.
Unlike most private sector contracts, when doing a fully burdened labor hour contract with the feds, the contractor will spell out exactly what their profit margin is. Generally this is only 6-10%, which is considerably lower than the private sector. Despite what everyone thinks, doing business with the gov't isn't all that lucrative. It's an extremely competitive market in which the bottom-line cost is almost always the most important factor. Contracting officers are even prohibited by law to give preferential treatment to companies that have previously done a great job.
I can't really comment on forced furloughs, because I'm not familiar with how Northrup operates. But just because they do "government contracts" doesn't necessarily mean they can afford to keep highly-skilled staff on the payroll until they find a new project for them. Federal contracts can really help with sales revenue because they can be large awards and the government *always* pays. However, the trade off is all the red tape (which increases G&A costs) and the low profit margins. Next time you hear about Company X getting a $10M contract, don't just roll your eyes. Get a hold of their proposal and the contract and see what their actual profit is on the contract. Both documents are public property and available upon request from the federal contracting officer that made the award. (Defense related contracts might need to be pried from gov't with a FOIA request though)
Yet magic and hierarchy arise from the same source, and this source has a null pointer.