The DOD is labeling a domestic company a supply chain risk - label generally reserved for hostile foreign powers and their cooperators - because that domestic company didn't agree to its contract terms.
Judge Lin's order finds that it do so specifically to harm that company, without due process and without the remedies Congress specifically requested be used when it drafted the law. The DOD was, in essence, using a law illegally.
The version of events you present does not seem to be tethered to reality.