Birmingham City Council has dismissed a complaint that it broke procurement rules to award a lucrative cable installation contract for the new Libary of Birmingham to its own IT partner, the Capita-run Service Birmingham.
Following an investigation city council chief executive Stephen Hughes concluded the council acted properly and met its legal duties under procurement law.
The complaint came from Witton-based company Mayflex, which claims it was treated unfairly while bidding for the contract, thought to be worth about £700,000.
Managing director Andrew Percival alleged that a key clause, which prevented his company competing, was not made clear until near the end of the tendering process.
The clause specified that a particular type of cabling, known as Krone, which Mayflex could not supply and Mr Percival argued is more expensive, was required.