But at it's most basic level this argument boils down to, "if you use company X's product, then you might not see any value in company Y's product; therefore company X's product should be banned because it is limiting the marketplace." In this case, they are painting things with a broader stroke by seemingly bringing up some sort of 'Open Source' vs 'Closed Source' argument, but the main point still stands. They are saying that because Open Source takes away profits from Closed Source companies that it must be eliminated, which is ludicrous.
They may put on a veneer, of claiming that they just want a level playing field, but it seems to me that they just don't want anyone inside of the government to have a preference against them (or be a champion for their competitors). Why? Not because of some sort of free-market-lets-join-hands-and-sing Libertarian nonsense. They feel that they can win government contracts when there is no one speaking out for Open Source because then their sales people don't have any competition when marketing their products to the government.