In fact, open source is almost always worse--the proprietary company can at least generally demonstrate that they can do what they say.
And, for contracts like these, the end customer generally gets the source anyway. So, to the end customer, there really is no difference.
And this is before we get into the whole "Whose budget holds the money for that maintenance over time?" political football. A lot of government contracting is about transferring uncertain future payments into certain present payments. And someone will try to kill that budget at some point.
I love open source. But open source software almost always fails hard when the subject isn't relevant to software programming.
VLC I don't know about.
The fact that there are so few successful, non-programming examples exactly demonstrates the point.
It instead was mostly developed by a schizophrenic Austrian math genius in his free time from not being regularly employed, plus some other grad student types.