It there a FAR reference that addresses notification when only one unacceptable proposals in received?
Was the solicitation provision, FAR 52.215-1, Instructions to Offerors – Competitive Acquisition included in the solicitation? If so, please see the following excerpt:
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(1) The Government intends to award a contract or contracts resulting from this solicitation to the responsible offeror(s) whose proposal(s) represents the best value after evaluation in accordance with the factors and subfactors in the solicitation.
(2) The Government may reject any or all proposals if such action is in the Government’s interest.
(8) The Government may determine that a proposal is unacceptable if the prices proposed are materially unbalanced between line items or subline items. Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly overstated or understated as indicated by the application of cost or price analysis techniques. A proposal may be rejected if the Contracting Officer determines that the lack of balance poses an unacceptable risk to the Government.
The FAR reference you cited (FAR 15.503(a)) appropriately explains that the offerors must be notified promptly in writing when their proposals are excluded from the competitive range or otherwise excluded from the competition.