Bingo. Any governmental agency is seen as a "deep pocket"- the lathes were used, who knows how they would be abused by a new owner, but you can bet that if somebody gets hurt, they're going after the agency that sold that allegedly defective piece of cr@p to them.
The other thing is the process for selling surplus items- offer to other agencies, put up for bids, etc., etc.- easier in the long run to just chuck it.
I talked to a woman at local recorder's office once about the procedure for disposing of an old mobile home. She launches into this incredibly complicated process- apply for lost title, apply for permit, get it inspected for asbestos, submit eleventeen things to the Dept. of Licensing, etc. I finally said "How about if it just quietly disappears?" She said "I couldn't tell you to do that, but will admit that that's how most of them are handled."