A contract worth £2.4m, signed by the county council and The Data Base (Nottingham) in September 1998, is being investigated by the police and by auditor KPMG.
Documents recently released to council members show that the company won the right to provide Internet access to schools even though it had been last on a list of 12 preferred suppliers.
Councillors have received copies of an internal audit report which claims there was a failure to comply with national and council regulations, leaving "significant areas of concern".
Correspondence between officials working on the project, also given to members, claimed there was "bias" in favour of The Data Base.
An internal memo stated that the firm received "privileged information" before the contract was awarded, and warned that suppliers had not been treated equally.
Council opposition leader Rob Parker plans to raise a series of questions about the contract and tender process at the authority's next meeting on 12 July.
Lincolnshire Police began an investigation after receiving documents relating to the NGfL project from council officials.
The authority's Conservative leadership is under pressure to respond to a public interest report from KPMG, which exposed a "climate of fear" and which accused some senior members of "improper" practices.
A spokeswoman for IT solutions provider Ramesys, which acquired The Data Base in January 2000, said the tender came before the company take-over and that the principals of The Data Base had since left. It would help with any enquiry, she said.
The council was not available for comment.