Ok everyone....This is how the grommets work. As you tighten screw into them, the cylindrical grommet starts to flatten like a washer to the point where it can no longer pass through the hole you drilled.

Basically the whole strength of the skidplate install is riding on the ability of the rubber to:

1. Remain flat and hold its position without any dry rot resulting from elements.
2. Remain attached to the brass cylindrical nut that is glued into the rubber.

Honestly, I was expecting better engineering from BMW. While the wow factor is there, the install gives me little confidence with respect to durability. With the skid plate being in the front of the car, I may go back and replace these stupid grommets with conventional stainless steel nut bolt combination with a few washers.

Now if you are hell bent on using the grommets, I would recommend something a hair smaller than the 25/64 drill bit. The tighter the grommet fits, the higher chance of this thing seating well. When you start tightening, go all the way and keep the pressure on the screw. I recommend a power driver set to its lowest torque setting and then immediately hand tighten. Don't leave a screw partially tightened thinking you will come back after doing the other two. More than likely, the darn thing will slide out before you have put in the next screw.

Overall, the fit of the skidplate is not BMW quality. The adhesive tape does not keep the sides secured to the bumper. I can see gaps on both corners. They look pretty crappy since you can see the adhesive tape has let go! Will post photos in a couple of days.

This is my 2nd disappointing purchase of a BMW factory accessory. The last one was my tow hitch which came with the wrong bolt heads (17mm instead of 16mm) The bolt cage on the receiver was made for 16mm!! Took some doctoring, but once installed hitch was fine.