The council picked the firm for the £80m rebuild scheme despite it being the only firm to tender for the redevelopment of the Channel View estate.
The council said it alerted over 20 firms on the Crown Commercial Services framework RM6088 to encourage strong competition for the project and also invited all contractors to an online presentation setting out the tender opportunity.
Despite these steps to increase participation, the council said only Wates tendered the project.
The redevelopment of Channel View will see the 214 existing homes demolished at the estate, including a 13-storey tower block, replaced with around 320 new homes.
The council has now appointed Wates as development partner to construct of phase one of the Channel View regeneration project, including 81 older person council flats over two blocks of up to 12 storeys in height with associated facilities and parking.
Wates will also carry out the design development, planning and construction of all future phases of the Channel View regeneration scheme consisting of around a further 240 mixed-tenure properties, improvements to the Marl park, a new footbridge.