Interestingly, even funded projects at the Census Bureau use open-source, for example the on-line form last year was a complete open-source yet funded project. A lot depends on what office and what bureaucrat leads a project.

Since State and County QuickFacts grew out of a more enlightened office (mine), open-source may have been the path we chose even with funding, but as it was, open-source moved the project along, eliminated procurement, and let us concentrate on the data, interface, and user.

Funding would allow us to put more people on the project, expand data sets, and provide some PR/marketing efforts. But again, open-source lets us put the money into resources aside from expensive software.

(edited to add some more info)

And yes, this was an advocacy talk. I find it helps others in less enlightened workplaces to hear about government open-source projects. "Hey - even the government uses this stuff!"