The Chinese-backed group for the bid covering the St George, Sutherland and Illawarra regions in NSW expressed their "deep disappointment" to the governing body and have asked chief executive David Gallop to reconsider their decision.
Bid chairman Les Murray wrote to Gallop last month saying their preparations have progressed so well they were ready to run a W-League team, which would take the competition to 10 teams like the A-League.
However, their proposal was turned down and Southern Expansion CEO Chris Gardiner said he couldn't understand why.
"The FFA says it wants to grow the women's game and Southern Expansion is in a position to fund the team, at levels that meets the best benchmarks set by Professional Footballers' Australia and with a marquee player, but the FFA won't even discuss the matter," Gardiner said in a statement.
"Why would any peak body decline even to discuss an offer to bring the competition up to 10 teams to match the men's competition?
"Deep disappointment, indeed dismay, best describes how we feel about the unwillingness to even talk to us about our solid plans of growing the women's game - that's why we're urging the FFA to reconsider this decision."
Gardiner claimed football supporters were "miffed" by the blaze of publicity around the launch of AFL Women earlier this year and said Southern Expansion could help strengthen women's football.
He said the bid would have been able to put together a strong W-League team at short notice and that grounds were available for them to play at.
FFA has delayed discussions around the expansion of the A-League and W-League while it sorts out a number of issues, including a governance crisis and a stalemate in funding negotiations with club owners.
Southern Expansion is being bankrolled by Chinese property giant, JiaYuan, and also has SBS pundit Craig Foster as their head of football.