SAN DIEGO (TheStreet) -- The post-close plunge in Neustar's (NSR) shares is the result of a bidding process gone awry.

As I pointed out in my October piece headlined, "Why Neustar Could Fall," the company is in the process of a bidding battle for the database that makes it possible for you take your phone number with you if you move or change carriers.

For the first time since Neustar started managing the database in 1997, the portability contract, as it's called, is up for grabs.

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Originally, a decision was expected last September. It was then, without explanation, pushed off until around Jan. 20. 

Then, as I mentioned in a piece last week, rival in the bidding process, Telcordia Telecommunications, cried foul -- writing a letter to the FCC, saying that it was inappropriate for Neustar and the FCC to hold discussions so close to an announcement of the bidding results.

Then came Wednesday's post-close news: Neustar, in addition to reporting earnings, explained that it had tried to get a round of new bidding going in October -- and even submitted a new bid -- and the bid was rejected. 

In an explanation on the company's earnings call, CEO Lisa Hook said: "Last Friday, we were notified that our revised proposal would not be considered." But, she added, "our process request for an additional round around their proposals," was not addressed. "We feel strongly that revised proposals are an appropriate and necessary next step in this process. We don't believe that we're at the point where proposals are optimized for all industry members..."

Reality Check: Nobody seems to know why the bidding process has taken so long or how this will end. Neustar isn't expected to lose the entire contract, but this much is certain: If another administrator is brought in to share the contract, or the contract price is lowered -- or the terms change -- Neustar will not be rising.

-- Written by Herb Greenberg in San Diego

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Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security.