I'd vote for totally normal for a government agency.
Quite often, government funded agencies don't have any money to fund parties like this, and the managers/supervisors can't afford to take everyone out (and likely can't write it off the way a private business owner could). They may also be barred from holding events during work, or not allowed to serve alcohol on the premises.
As far as potluck vs going out, $10 is pretty cheap for a pay your own way event. I'd prefer that to having to lug a potluck dish to work on the bus, jamming it into the fridge with everyone else's potluck contribution, finding some way to heat it up after work, and then having to stay after the party to wash dishes and clean up the tea room for the next day. And if I buy my contribution rather than making it, I'll likely be out more than $10.