Legal proceedings were brought by Triumph Furniture after it challenged a contract awarded to a rival.
Top civil servant Sir Derek Jones said "formal management action'" had begun in relation to staff members involved.
The contract was for furniture, fittings, planning and interior design for three public bodies.
They were the Welsh Government, the National Assembly and the Higher Education Funding Council for Wales.
Sir Derek, the Welsh Government's permanent secretary, made his comments in a letter to the assembly's Public Accounts Committee.
In the letter, he said the failings "centre around poor information management and a lack of oversight which, ultimately, weakened the position of the Welsh Government not only in terms of public perception of the robustness and transparency of the procurement process, but at the point where the Welsh Government was required to defend itself in subsequent litigation proceedings".
He added that "there is no evidence that anyone received personal gain from the procurement process".
The Welsh Government was alleged by the bidder to have breached EU rules.
Sir Derek previously told AMs that compensation was paid following an arbitration process.
A "number of collective and individual failings" were found by the Welsh Government after it paid out £1.25m compensation after a contract dispute.