H1B, H4 Visa

I planned for my India trip and was eligible for the dropbox for the Visa Stamping. Following is my experience:

Oct 3: Submitted documents through Dropbox
Oct 13: Notified by email to collect the Passport.
Oct 14: Collected the Passport and realized that there is no Visa Stamping and saw a 221(g) letter asking me to appear for the Visa Interview.
Oct 20: Appeared for the Interview.
I am working for Employer 'A' and my end-client is 'B'. The end-client has State projects and I am working on one of those projects.
Following were the questions asked:

Me: Good morning Officer .
VO: Good morning. Since how long you have been working for Employer 'A'
Me: Replied
VO: Who is your end client ?
Me: Replied ('B')
VO: Can I have the end -client letter
Me: Showed her the end client letter
VO: But who is you final end client?
Me: Again replied 'B'
VO: She asked again' Final end client ?
Me: I replied 'State of XX'
VO: Which Department ?
Me: Replied
VO: Can you show me letter from 'State of XX'?
Me: I again showed my end client letter which I showed earlier and explained her this is my end client and I only have letter from them ( which in my case is 'B')
VO: gave me a 221 (g) and requested for the following documents :
I-797, LCA, I-129, and end client letter and she wrote in Bold - Letter from 'State of XX'.
She said send this letter to the ID mentioned and you are good.

I could not understand the fact that when I had the Work order from my end client which clearly states that I am working on this state project then why is the letter required from the 'State of XX'

I explained everything to my Employer and my employer said that they will get the letter from the central team of 'B' and send the response to consulate.

Nov 7: My Employer replied to the consulate with all the documents and the letter. ( this was not the letter from 'State of XX', but letter from my end client 'B' detailing the contract between my Employer 'A' and the end client 'B' and my services.
Nov 14: Got a reply from support@ustraveldocs 'Your case is currently on hold under Section 221(g) of the Immigration and Nationality Act (INA) pending submission of Letter from 'State of XX' . Please submit the following documents in PDF format to [email protected] .

My query is :

1. Since me and my employer are unable to get the letter from 'State of XX' as my end client 'B' cannot provide this letter for the Sub-Contractors. They can only provide the letter in a standard format. Can anyone suggest any alternative.
2. Has anyone faced the same situation and if so, what was the approach
3. Lastly, I tried to reach out the Visa processing Centre- Customer Care and explained my case in detail. I wanted to know, if I can take an appointment again to explain my case to the VO but the executive replied that I can only send them an email to convince them and have to wait until they reply.