Agilisys and Serco have been shortlisted for the final round of bidding on providing IMT (information management and technology), finance and people management services to Lincolnshire County Council.
The deal is expected to be worth between £85 million and £110 million over five years, with an option to extend for two years.
A current contract for the services ends in 2015.
Pete Moore, Lincolnshire County Council executive director for resources and community safety, said, “We’re confident that the two finalists can best meet our needs.
“We’ll continue to work closely with these companies over the coming months, as they draw up their more detailed final proposals.”
The successful bidder will be chosen in "early 2014".
Mouchel currently supplies the BPO services to Lincolnshire so will therefore now lose the work after failing to be shortlisted.
TechMarketView analyst Georgina O'Toole said, "Mouchel has been the authority’s prime supplier since 2000. It will be a big blow to Mouchel that it has failed to make the final shortlist."
She said the council has taken a different approach to this procurement, choosing to break down the previous single wide-ranging deal into several contracts, as well as taking some functions back in-house.
Other support services, such as pensions, catering and property management will be handled under separate procurements.