It seems like absurdly bad faith starting at breaking the contract (over "you have to follow the law", no less!) and then to retaliate after that with trying to destroy the company's reputation and ability to do business. The boot licking going on here justifying the government operating in bad faith is both disappointing and short sighted. I didn't think the leopards would eat MY face!
I don't know how anyone can look at the situation and see anything but an abuse of power. The government could have just as easily contacted with another provider. This whole thing is vindictive