MEDWAY NHS Trust has been forced into negotiating with the lowest bidder for the redevelopment of Medway Hospital at Gillingham, Kent.
All three tenders came in above the 35 million budget earmarked for the scheme, but the works will still go ahead.
Amec, Kyle Stewart and Kier tendered for the project. But Medway NHS Trust is now talking only to Kier, which is believed to have sent in the lowest bid.
Originally, several firms including Bovis, Laing, Sir Robert McAlpine, Tarmac and Wimpey were understood to be interested in the 36-month scheme. But only three contractors decided to go for the job.
Sources close to the project suggest the bids were 5-10 per cent higher than the original allocated budget.
The trust indicated that an announcement on the successful contractor was imminent. A spokeswoman said: We are close to a signing date within the next fortnight.
The pricing issue is also believed to have been confused by the tendering of a contract for enabling works at the same time as firms were bidding for the main contract.
Ballast Wiltshier won this 1.5 million contract, which involves demolition and services projects. It has now started work, but it was not invited to tender for the main scheme.
This project is one of the few remaining health care schemes not to travel down the Private Finance Initiative (PFI) route, although a small PFI project is planned at the site in Windmill Road.
The design and build contract will include gynaecology and paediatrics departments, a day surgery unit and out- patients department, five operating theatres and an X-ray unit.
A decision has yet to be taken on whether to include nurses accommodation in the scheme.