Angus Council has awarded the Kinloch contract to Mansell.
But councillors were surprised by the low level of bids and were expecting prices to come in 10% higher for the scheme.
Five bidders tendered for the job with Mansell the cheapest at £6.7m and Galliford Try in fifth place on the list with the highest bid of £7.3m.
A council report stated: “It was originally anticipated that the tender returns for this project would have been in line with the tender figure provided by the fifth placed contractor.
“Due to the current volatile state of the construction market tender prices have been difficult to predict and this is indicated by the prices received from the five contractors.
“The general level of pricing contained within the lowest offer is considered to be very competitive having regard to the nature, specification and extent of the work involved.”
The other contractors who missed out where Muirfield, Robertson and G&J Seddon.
Work will start on the site later this month with a contract period of 94 weeks.