Well it's plain corruption, but yeah it's not like the $10,000 toilet seat cover,[0] $7,622 coffee maker,[1] or $37 screws[2]
[0] https://www.military.com/defensetech/2018/07/11/air-force-no...
[1] https://www.nytimes.com/1984/09/20/us/military-price-on-coff...
[2] https://www.latimes.com/archives/la-xpm-1986-07-30-vw-18804-...
The cost isn't for the item, it's for the paperwork attesting to the acquisition and delivery of the item.
Whether one screw or 500 screws are ordered, it still takes an hour or two to fill out the forms and submit the invoice.
Think of $37 as the "fuck off" price, except the buyer has no one else to buy from because the seller is the only one meeting FARS/CMMC regulations