It sounds like they took issue with the fact that you were performing end-item testing in-house, but that your in-house laboratory doesn't have a certification or validation that it is capable of performing the tests at the level of an ISO 17025 lab.
If this is the case, the relevant portion of the code is in module 2.
Analysis 2.5.6 Product Sampling, Inspection and Analysis
iii. All analyses are conducted to nationally recognized methods or alternative methods which are validated as equivalent to the nationally recognized methods.
iv. Where external laboratories are utilized to conduct input or product analysis, the laboratories shall be accredited to ISO 17025 or an equivalent national standard.
The combination of these two bullet points has established in-house micro lab criteria for my SQF auditors. What they've always requested is evidence of accreditation from outside labs, and a "validation" study for any parameters we tested in house. This meant that your lab did not need to be ISO, but that you did some sort of test to make sure your lab was capable of operating at that level. An example would be testing samples and sending out duplicates to an external lab quarterly or annually to ensure that your results are reasonably close to that "national standard", or a more scientific evaluation like participating in AOAC proficiency testing with the methods and equipment used in your lab.
Typically in food you're held to the methods in the FDA BAM, USDA MLG, the compendium of methods, or an AOAC or AFNOR official method. But most in-house labs are using various market methods (e.g. new rapid detection media) that are simpler and easier to interpret without an actual microbiologist. This requirement makes that okay provided you've "validated" that they're equivalent to the nationally approved methods both in their sensitivity and specificity, and using your equipment and personnel.
With the amount of testing you're performing, I would recommend AOAC proficiency testing, and use it as a performance metric for your equipment and personnel as well.