Another pricing Question =(

Ok my Girlfriend did a vector poster in freehand.
(for a Gov agency)
It was basicly 4 characters she created, and a car.
All up with alterations and a couple of meetings it would have taken her about 24 hours.
She charged about [color=red]24x$30 = $720 AU[/color] charged [color=red]$700[/color]

Now they want more for a book.
It requires the 4 old characters and 4 new ones in 20 vector illustrations.

Based on the pricing for the last one, 20 pictures works out to [color=red]$14,700 AU.[/color]

They have told her they have a minimum of [color=red]$4,000[/color] for design.
They want a quote from her for this.
I think they are hoping for around [color=red]$4,000[/color] but they told her to give them the quote, [color=red]$4,000… $8,000[/color] whatever it works out to be.

They said if it cost to much they may have to reduce the amount of pictures, or use some twice. My Girlfriend told them not to do that…
As they are a government agency they need the quote so they can put in a request for funds… But if it is too much then the project might be scraped.

There is also a second book after this one they want her to do, details unknown. And some other odds and ends that she could pick up.

She really loves illustration to the point that she would almost be willing to do it for free.

They have also asked for some buisness cards because they have friends in other government departments that may require her services.
(so she doesn’t want to price herself out of the game)

So my question is what would you charge in a situation like this ?

Do you quote the [color=red]$14,700[/color] + Design, layout, meetings and alterations etc etc…

Quote [color=red]$14,000[/color] giving them 1 picture free.

Quote [color=red]$10,000[/color] or less.

They would also need some web pages to reflect the new book, and it would be easy to sell them on a screen saver and flash version of the book.

Thinking they maybe scared of [color=red]$10,000[/color] and then may lose the job and future work.
One idea I had was give them a quote for [color=red]$18,700[/color] for:
20 pictures
web pages
screen saver
flash version of book.

But then give them a [color=red]$8,700[/color] discount and only charge them [color=red]$10,000 [/color][color=black]that way they are thinking about the [color=red]$8,700[/color] they are saving instead of the [color=red]$10,000[/color] they are going to have to request funding for[/color].

Remember it is a government department, it’s not comming out of their pockets but they have to ask the powers at be for funding, and they only get so much a year so they carn’t use it all at once… But then it is the government and they do have deep pockets.

So for all you freelance people out there, what would you do in this situation ?

EDIT:
She has worked for them 3 times before.
1 poster (vector) $700
Medical illustrations for a book. $1000
Bunch of colour illustrations $1,300

Interesting? How much work have she got under her built. Did she just graduated and just starting or is she already in the business for a couple of years. I would just do it as a good gesture (it is a gov agency= will get paid). But if she does have other jobs and is busy just pass it over politely. But than again, more work will come her way by referrals if she does it.

She currently works fulltime for a publishing company… crapy magazines and guides…

She is over half way through her diploma, the company contacted one of her teachers and he recommended her for the job. They give her time off for classes… She has been their almost 2 years but hates it.

She has done logos and other stuff, + the edit that I put above.

She has also thought about asking them to hire her fulltime, inhouse, so that she can do all the illustrations they want and they dont have to worry about cost. She can also do all their reports and brouchers etc.
(but then is their enough work to justify employing her as staff)

She is busy with working fulltime and homework but she really loves illustraition and wants to get out of publishing into it.

Here is her deviant page.
It has some vector stuff she did for fun, none of her actual paid work.
http://turbocat.deviantart.com/