I agree... I spent way too much time on this question too...
But I want my time not go wasted by teaching it to others so that their time don't go wasted

Let's identify the argument.
There is a supplier (let's call it... A). And it runs 3 factories (let's call it B C D). So let's imagine you are the CEO who has made a contract with A. Your employee or investigator brought 10 items from B C and D as a sample of items. Two were defected. Now you are pissed. Now, you are ready to sue the supplier because the defect rate supposed to be below 5% of ALL manufactured item. But according to sample, it's 20%. But your lawyer says "nope... you may be wrong."
How?
You may now understand the flaw due to capitalized words. You as a CEO assumed that the sample that the investigator has brought you is REPRESENTATIVE of ALL manufacturing items. However, could it be possible that your employee only picked out the ones that were defected? YES! If so, is it representive of ALL the manufactured items? NOPE!
Now let's go attack answer choices A to D (E is excluded because it's just so wrong).
A: All the right terms seem to be there but wrong because of one word: SMALL. We really don't know what is SMALL. Is 10 small like in my hypo? Could be. But may be not. Just because a sample has "small quantify" does not mean it's not representative. Remember, we are concerned representativeness not small quantity.
B: The most HATED ANSWER CHOICE EVAAAAAA. But here is the thing. Does the author assume that investigator was as likely to choose defected item as they were to choose non-defected item? HELL YEAH. Otherwise, how the hack would he assume that the sample is REPRESENTATIVE? But here is the thing. Even though B is true... it's not a FLAW. It really isn't. Imagine such assumption is true. Good. If it is true, as Brian has pointed out, it would straighten the argument to the max! If the investigator had 50% chance of picking bad item and 50% of good item and ended up 20% defect, that is a clear violation of contract. But... flaw is something that points out the weakness of an argument. Ironic much? Anyway, it's wrong because it helps the argument.
C: ANOTHER tempting choice. However, it works just like B. Think about it. Let's assume this answer choice is correct. So, it's saying that out of 3 factories B,C, and D, D were responsible for the 20% defects while B and C had 0% defect rate. Sounds pretty good doesn't it? But again, what's the contract? That overall defect rate should be 5%. According to sample, it's 20%! So no matter who is responsible for this defect, if the sample contains 20% defect, it's a violation. C is simply saying that "hey factor B and C are innocent." But who cares?
D) This is what we were looking for. Since, investigator was only picking out the defective ones, it's saying that the sample is biased.
Hope this helps.