Cumbria County Council has rejected bids from BT and Fujitsu to provide its superfast broadband roll-out across the region.
The central government funded project planned to give 90% of homes in Cumbria a minimum of 25Mbps broadband speed by 2015.
Despite the tech giants being the final two in the process for the £40m contract, Cumbria CC has decided that neither bid is suitable.
A statement from Cumbria County Council said: “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,”