Cumbria County Council has turned down bids from BT and Fujitsu to complete its superfast broadband roll-out across the region.
The two technology giants were the final competitors for the £40m contract, funded by central government, to give 90% of homes in the county a minimum of 25Mbps connections by 2015.
The council was expected to award the contract this week but, after a cabinet vote, it decided neither bid was suitable for the project and a new procurement process would have to take place.
“Cabinet received detailed submissions from the final two potential suppliers (Fujitsu and BT) and despite a lot of progress being made, neither of the final tenders had completely fulfilled the original and full requirements of the procurement process,” read a statement from the Cumbria County Council.
“Both suppliers will now be invited to take part in new negotiations, which will lead to revised final tenders being submitted later this year.”
A final decision on the new bids will be announced in September.
The councillor taking the lead on the Connecting Cumbria project, Elizabeth Mallinson, said the decision to reject both bids was extremely difficult. But she said the council believed it was the right thing to do.
“Although we have not identified a preferred supplier at this stage, we have made significant progress in terms of our overall broadband strategy for Cumbria, both in this procurement process and in attracting public and private funding to help deliver superfast broadband across rural and urban Cumbria,” Mallinson said.
“The Connecting Cumbria programme is a very complex initiative and one that we need to get right if we are to meet the needs and expectations of Cumbria’s communities and businesses.”
A spokeswoman from Fujitsu admitted the decision was an unexpected outcome, but added: “We are currently reviewing our options and we remain focused on this and other next-generation broadband projects.”
A BT spokesman told Computer Weekly BT would continue to work with Cumbria County Council to try to win the broadband tender.
Despite its rural location, Cumbria has become one of the UK’s leading examples on how to get broadband to remote areas.
As well as this government-funded scheme, smaller projects in villages such as Great Asby have shown communities putting in their own money to get connections to areas seen as less commercially viable by big telecoms companies.
Earlier this week, Conservative MP Rory Stewart told a House of Lords select committee that projects like these were the best way to reach the final 10% of the UK where the likes of BT and Virgin Media would not build to willingly and where government funding may not reach.
“I believe in the ability of communities to get the fibre deeper and further, [and] the key element to these schemes is the community contribution that allows them to get broadband that wouldn’t have been thinkable years ago,” Stewart said.