OTTAWA - An internal probe into a big-money Parliament Hill renovation contract now being investigated by the RCMP found no evidence of political interference, senior Public Works officials say.

But Montreal construction firm LM Sauve's low bid concerned the department enough that outside experts were brought in to assess the proposal.

Documents obtained by The Canadian Press reveal that LM Sauve's winning $8.9-million bid was nearly $2 million below the second-lowest estimate. That's a huge margin, especially given that the four other bids all came in within $500,000 of each other.

Senior bureaucrats at the Public Works Department spoke to The Canadian Press on the condition they not be named to explain why LM Sauve won the contract.

"We came to a conclusion that their bid was a little lower than expected," one official said.

"So we had a formal bid-review process with LM Sauve, and we went through it line item by line item by line item. Now, the bottom-line argument, if you will, on why they would be able to complete the work for that price is that they were going to do the masonry work themselves."

How the Montreal construction firm made the short list for the West Block renovation — and then won it — over much bigger companies is at the crux of a brewing controversy over the contract. The Mounties are investigating possible breach of lobbying rules and anti-corruption laws.

Construction boss Paul Sauve says he hired Tory-connected Quebec businessman Gilles Varin to help get the job and eventually paid him $140,000 for his efforts.

But department officials said a three-week search of emails and interviews with current and former staff could find no evidence of ministerial meddling. They said Sauve won the contract because it bid lower than the other companies, and Public Works felt they were the most qualified firm to do the job given their masonry experience.

The West Block controversy has consumed the House of Commons in recent weeks, with opposition parties raising the prospect that the Conservatives took kickbacks in return for handing out government contracts.

Public records show that executives with several companies that got government contracts donated to the Conservatives at a party fundraiser in the Montreal area in 2009. Sauve organized the fundraiser months after getting the West Block contract. He says he did so at the behest of Varin and the head of the Conservative riding association in Bourassa, Gilles Prud'Homme.

Public Works awarded LM Sauve the renovation job in 2008, but the company went bankrupt a year later and lost the contract.

Sauve said his firm could afford to do the work for less than the other companies because he didn't have to hire a sub-contractor to do the masonry work.

That news spurred new allegations that the West Block contract was amended at the last minute to favour LM Sauve. The NDP claimed Public Works removed a clause requiring the contractor to line up sub-contractors to do certain jobs, including iron work and copper roof repairs.

But Public Works officials said there was nothing unusual about the change. They said LM Sauve made the case that it wouldn't be fair to have to put a competing masonry firm on its bid sheet. None of the other companies complained about the amendment at the time, they added.

Sauve was one of five companies that bid on the work. The others were Thomas Fuller Construction, Paul Daoust Construction, EllisDon and PCL Constructors.

Documents obtained under the Access to Information Act show Fuller and PCL bid $10.6 million, while Daoust and Ellis Don bid $11.1 million.

Sauve insists his firm was qualified, citing its past work on federal office buildings in Montreal, and upcoming work on Vancouver's city hall.

"There's no question in my mind that we qualify. Irregardless of the controversy, we qualify," he said. "The issue is not that. Not at all."

The contract documents show Public Works felt LM Sauve was qualified to do the West Block masonry work. A pre-qualification checklist from January 2008 shows Sauve met the same requirements as established firms such as RJW Stonemasons and Atwill-Morin.

But some of those competitors have criticized LM Sauve's workmanship and questioned how the company got the job. Some also wonder why the government still goes with a lowest-bidder system.

"Why is it Kmart shopping on Parliament Hill?" RJW Stonemasons president Bobby Watt asked Monday. "Why is the lowest price the law?"

Masonry work on the West Block renovation has been at a standstill since RJW Stonemasons walked off the job Oct. 15 and went to the Mounties.

Company president Bobby Watt says he isn't being paid by the Montreal-based bonding company running the project. He also says he's being squeezed out of the masonry job in favour of another firm, and he's asked the RCMP to look into that.

A parliamentary committee begins hearings into the West Block affair this week.