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Indeed, probably for the best, even. You don't know what systems Claude will have changed in the code especially as these days people aren't even reading the code and Anthropic has a history of trying to sabotage others' code such as during the Fable release debacle where they outright said they'd do so if you're working on frontier AI for example. I wouldn't let any sort of company like that anywhere near critical systems.
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The point is: using Claude to design a website, do accounting, run a marketing campaign, is not a supply chain risk for the DoD, but taken literally and given the scale of the DoD "no DoD supplier can use Claude for anything" clearly is punitive.
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It is, because the DoD doesn't know what the contractor is doing with Claude, or what Claude is doing itself. Like I said Anthropic could just as maliciously sabotage if they detect they're being in autonomous systems, why do people seem to believe they couldn't?
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The DoD can require contractors not use Claude to do whatever they're being contracted to do.

It doesn't need to say if you do any business with Anthropic (for other customers, internal tools or processes), you lose all your contracts with us.

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