There is probably a damned good reason why they were looking at MS products only, and it was most likely because they have an assload of MS Stuff that would cost a mint to convert.
Vendor lock in is really a reason to re-evaluate your IT, not bury your head in the sand and keep cutting checks. If you wake up one day and realize that you absolutely can not switch despite the existence of competitors you have a problem. Open standards and open source software keep the vendor honest.
I mean if they require Exchange and Sharepoint...
They don't require Exchange and Sharepoint, they require e-mail and collaboration suites respectively. By defining the need as a product you have made it clear you have no interest in the competitive process and wish to continue to support the incumbent (in this case making their position all the more entrenched, making this an even stronger argument on the next go-round... nice)
they have a metric ton of VBA stuff being used
[see vendor lock-in]
and Windows desktops everywhere
Windows desktops aren't the limiting factor they maybe once were -- much open software runs on windows (some argue there's already more open source on windows than on linux these days) and much corporate software is going web-based rendering the operating system moot.
why in the hell should they be forced to accept bids that won't work?
Again your requirement definition shows the real problem. And you haven't even decided if the product will "work" just that...
Google docs ain't no MS Word.
Let's face it: 90% of the users use the same 10% of the functionality of The Office Suite (whatever suite that is) and other suites like LibreOffice and in large parts even Google Docs already meets those needs. And not having some of these "advanced" features might actually be a good thing: That the spreadsheet is most commonly used as a database (and not for numerical calculations) should be an indication that all is not right in IT Userland.
What good will come of having to waste tax dollars on a bid for a solution that won't actually solve anything?
Long term vs. Short term.
If you can move to open standards (and if not open source, then sticking purely with the open standard and not the vendors proprietary extensions!!) then you should be able to achieve savings over time. Even if you decide to stick with a licensed/vendor-supported option you will then have an easier time migrating to a competitor. This keeps them all honest. Competition is good for the consumer -- there is no competition in this fixed/directed bid to Microsoft.
Pitiful actions and bad form Google, and from someone that has as much marketshare as you do it just comes off as looking petty and vengeful.
aww shucks, just saw this... don't know why I missed it before I wrote all the rest, so I gotta ask: did I just waste my time answering a troll or a shill?