As you know, the purpose of a competitive proposal submitted to the federal government is to win a contract or grant.
The final decision by the federal department or agency in question usually rests upon the so-called differentiators, that is, those factors that make company A better qualified than company B, C, or D in the opinion of the proposal reviewers.
Many proposal writers think that capitalizing certain key words will "differentiate" their company and therefore increase their chance of success.
I once worked for a managing editor who said that good writing should stand on its own; that the words themselves "tell the story" and should not need to be "emphasized" by using bold or italics. For our purposes here, and putting aside names and proper nouns, over-capitalization is a form of emphasis and will not result in the federal government opening up its coffers.
I edit proposals for the government services division of an IT company. So the tendency of many of our proposal writers is to uppercase any and all words that relate to (1) our company's technical and management expertise and (2) the language of the request for proposal. As a result, terms such as information technology, information assurance, quality management, subject matter expert, root cause analysis, compliance verification, and hundreds more, are routinely uppercased.
If I had a nickel for every instance of unnecessary/improper capitalization that I've seen just in 2008, I could be a federal bailout program unto myself!