Galliford Try, Sir Robert McAlpine and Wates were the three firms to miss out. The defeat is a particular blow for Wates as it is already carrying out work at the site off Gresham Street.
The job is due to finish by the end of the year.
One Wates insider said: 'It's a big disappointment not to carry on when you' re already on the site.'
Bovis Lend Lease is still to receive written confirmation for the second phase of the work but it has had a verbal go-ahead and the losing firms have already been told they missed out.
One contractor said: 'We did a few calls to try to find out who had won when we found out it wasn' t us.
'The rumour was that InteriorExterior had come in at the last minute with a low margin and nicked it, but if Bovis have had the word then I guess that's that.'
The second phase of work will involve lowering the ground in front of the offices to connect the streets running on either side of the building.
The Northblock building will then be refurbished and extended and a new entrance created. Work on the second phase is due to start next spring and finish in early 2008.