B Dubs isn't subsidized by tax money. Plus, they want something people are familiar with. It's already been proven that, aside from $99 Touchpad sales, people don't want a tablet, they want an iPad.
Why so serious Mac Rumors?
No, they chose it because it's cheaper
and because Google let them mess with the OS however they want:
http://www.cnn.com/2012/02/03/tech/mobile/government-android-phones/index.html
"Rather than building special handsets hardwired with secure components, the government plans to install its software on commercially available phones, the people familiar with the project said. This approach is far less expensive and allows the government to stay up to date with the latest phones on the market, they said."
...
Still, Apple's iPhone and iPad are also highly desired among U.S. officials, and people involved in the U.S. smartphone program said their goal is to support any type of smartphone. As CNN has reported, the Chairman of the Joint Chiefs of Staff, Gen. Martin Dempsey, uses an iPad to read his classified intelligence by downloading cables and disconnecting from the network.
...
However,
the government chose to work on Android first because Google already allows people to tinker freely with its code, said those working on the project. Federal officials have met with Apple, but they were told they could not have access to the core of the company's mobile operating system, said Angelos Stavrou, an information-security director at George Mason University who is working on the government project as a contractor, in a phone interview.