More concerns have been raised about the Queenstown Lakes District Council capital works procurement policy.
A panel of seven preferred contractors was established last year to carry out $125.5 million of capital works across Queenstown, Wanaka and the Lakes District.
The work accounted for about 70% of roading, water and sewerage capital projects planned over five years, while the remaining 30% of projects remained subject to an open tender process.
The set-up was designed to provide more security of work for contractors on the panel, QLDC chief executive Duncan Field said at the time.
However, councillors at yesterday's QLDC finance committee meeting argued the policy's lack of transparency allowed costs to increase, while smaller companies were squeezed out.
Cr Vanessa Van Uden said a mechanism for "keeping the preferred suppliers honest" was missing without competitive tendering.
"How can we be sure we are continuing to get best value if we don't test it?" she asked.
Committee member Ken Copland, a member of the Wanaka Community Board, said smaller contractors were being excluded without knowing how preferred suppliers were selected and Cr Gillian Macleod said the selection criteria remained "a mystery".
Mr Field said the selection of preferred contractors was based on long-standing relationships, but conceded management shared a degree of "nervousness" about the system.
A proposed new tenders policy, under consideration at the meeting, was left on the table, pending Mr Field's briefing.
