The New Brunswick government has cancelled its snowplow-manufacturing contract with a Quebec company.

Transportation Minister Roger Melanson made the announcement on Monday.

Craig Manufacturing, of Hartland, N.B. was recently passed over for the government snowplow-manufacturing contract over a $1,600 bid differential. (Shane Fowler/CBC) It comes on the heels of news that the contract, worth about $500,000, was awarded to Les Produits Métalliques AT inc., even though its bid was only $1,600 less than a Hartland, N.B., company, Craig Manufacturing.

"We didn't make a mistake," Melanson said. "We are looking at making improvements."

A review of the contract has been ordered, he said.

"There is a process in place. It was close, but our focus is New Brunswick jobs."

In a copy of the tender obtained by CBC News, the wording of the contract calls into question the need to award the contract to the lowest bidder:

"The Province of New Brunswick reserves the right to apply Provincial or regional preferences, consider local content in the evaluation of bids and/or refuse to consider bids from vendors from other jurisdictions when it is considered to be in the best interests of the Province," the contract reads.

André Tremblay, president of Les Produits Métalliques, says the company has already started building the snowplows and contends the contract can't be cancelled.

Our lawyers will see what we can do on this. To give the order and cancel the order, I certainly have things on my side. - André Tremblay, Les Produits Métalliques

"The tender was filed. The lowest bidder met the specs," he said.

"Our lawyers will see what we can do on this. To give the order and cancel the order, I certainly have things on my side."

The finance minister says he has yet to speak to Tremblay, but maintains the contract is cancelled, effective Monday.

Melanson says he doesn't know what repercussions may come from cancelling the deal, but knows the deal will be reviewed.

"I couldn't tell you what, if any, action will be taken," he said. "I've actually looked into this quite a bit deeper, and made the decision to cancel the contract. And we are going to do a complete review of this process."

The contract covers the building of 27 plows and 30 plow wings.

In an email leaked to CBC News last week, Ben Craig, an owner of Craig Manufacturing, explained to his employees that he was at a loss as to why the government was sending the work elsewhere.

"It's just very crushing to be let down like this by your home province," Craig wrote.

The company fully expected the extra $1,600 on its bid to be offset by the cost of travel that inspectors would have to incur travelling to Quebec, Craig wrote.

He also wrote the slightly higher price tag would be a minimal deterrent to keeping money and jobs in the province.

Both Craig Manufacturing and Les Produits Métalliques have had contracts with the New Brunswick government for years.