Just the accounting you'd need to sell the thing to the government would cost you $100K. Oh, and you'd have to pay yourself or someone else to take part in the bidding process or apply for the granted, and that has to be recouped as part of the sale cost. Er... you were planning on paying yourself for your time, weren't you?
Also, there's a big difference between building a prototype from junk you scrounged and building a reproducible product. When you build a product the second copy should be exactly the same as the first but cost less. Duplicating a one-off prototype exactly usually costs more. Why? Proof of concept prototypes are cheap because you make them with surplus stuff you have lying around or can buy for fractions of a penny on the dollar. You can be opportunistic. The problem is any particular set of opportunities (e..g the $10,000 assembly you picked up at auction for $50) aren't reproducible.
I had a colleague whose first job out of school was writing up a detailed specification for a prototype midget submarine a defense research lab built for the Navy. The Navy was pleased at the low cost and so they wanted to be able to build a second one just like it. Well it turned out that a second one would have cost a hundred times as much they'd have had to pay manufacturers to reverse engineer stuff or start up production lines. It was one of the pointless, futile tasks you dump on newbie engineers before you know you can trust their work.