Two contractors are left in the race for the £1bn Sheffield highways maintenance PFI.
Carillion and Amey will advance to the final stage of the bidding process, after Colas failed to make the cut.
The 25-year contract covers improvements and maintenance work on 2,000km of road, 65,000 streetlights, and over 350 bridges and structures.
Leader of Sheffield City Council, Councillor Paul Scriven, said: “Choosing the best contractor to undertake this work is crucial and we have to make sure we get it right. We’re looking forward to working with these two bidders over the next few months.
The Council will select a single preferred bidder early next year with the contract scheduled to start in August 2011.