Yes, take it seriously.

The offer means: the job will be yours if the company gets the gov. contract (usually they do, unless Mr. O8 thinks differently).

Well, can we draw back a little bit? Don't take FULLY seriously -- before the contract is signed. Before you start to work, keep looking, and follow up with about the status of contract negotiation -- which shows good sign of your commitment, which also gives you good info for your own judgement.