The main works are due to start on Lews Castle in two weeks time and are scheduled for completion in September next year.
Meanwhile the contractor, who this week completed the Envelope works at the historic building, has been forced to pay off 21 workers.
Neil Mackay & Co had been hoping to secure work on the main works at the Castle but the contract was awarded to off-island firm Graham construction.
The lack of local involvement in the winning contract originally caused some concern especially as there was a suggestion that the margin between the winning contract and the second lowest – which was from a firm called Robertson, working with Neil Mackay & Co - was relatively close to the winning price.
Last month a spokesperson for the Comhairle confirmed the figures as: “The 2nd lowest tender was £9,139,000. Successful tender was £8,512,000. The difference being £627,733.”
It has since emerged that all contractors bidding for the main works contract were asked to make savings to their original prices and there was a second round of tendering.
The revised price from Grahams is the winning price given in the council statement, but the second lowest is not Robertson’s revised price, as it is understood this may not have been accepted as competent.
However, it seems that Robertsons were not aware of this situation and believed their bid - which is thought to be less than £100,000 more than the winning bid – had been accepted.
In a statement provided to the Gazette, Frank Reid, Regional MD of Robertson said: “We’re obviously disappointed to have lost out on this contract particularly when the difference was a relatively small figure in terms of overall cost.
“We are proud of our strong track record in employing local people in all trades and occupations on projects and this would have provided around 75 jobs for local tradesmen.
“However disappointed we might be, we accept that there are strict procurement rules in place which the council has to follow.”
The £8.5 million contract includes work to create a new museum and archive extension on the site of the former glasshouses, as well as extensive works to repair and restore the interior.