I disagree with this. If they can't follow the formatting requirements of the application, then "what else are they overlooking, or likely to overlook once operating?" is a valid concern. They don't seem to indicate that it was an unknown requirement ("If the information does not have the letter A and the number 3 and then the paragraph below it, then it’s not there and you’re disqualified", [the CEO] said).

I see something of an analogy to the brown M&M's rider[1]. They don't particularly care that there are no brown M&M's, but the presence of them is a massive red flag that you have cut corners or not done your due diligence.

[1] https://www.insider.com/van-halen-brown-m-ms-contract-2016-9