New York Appellate Court Rules that Public School District is Prohibited from Using “Piggybacking” for Capital Project Work
New York’s General Municipal Law § 103(1) generally requires that all contracts for public works over $35,000, and all purchase contracts worth more than $20,000, are subject to the competitive bidding process, and such contracts must either be awarded to the lowest responsible bidder or on the basis of best value. In 2012, the statute was amended to authorize the state, municipalities, political subdivisions, and districts to engage in a new method of procurement—often referred to as “piggybacking”—without engaging in traditional public bidding. “Piggybacking” is a process by which one governmental entity is permitted to purchase or procure the same goods and services at the same contractual pricing, terms, and conditions as another government entity, the latter of which has already competitively bid the contract. Proper use of piggybacking can potentially result in significant savings and efficiencies, and by extension, benefit the public taxpayers by streamlining the process, reducing administrative costs, and providing access to a broader vendor pool than having each government entity conduct its own individualized and localized public bidding for the same type of procurement.
Authorization for Piggybacking
As amended, New York’s General Municipal Law § 103(16) authorizes various New York State agencies, entities, and political subdivisions, including school districts, to:
make purchases of apparatus, materials, equipment or supplies, or to contract for services related to the installation, maintenance or repair of apparatus, materials, equipment, and supplies, may make such purchases, or may contract for such services related to the installation, maintenance or repair of apparatus, materials, equipment, and supplies, as may be required by such political subdivision or district therein through the use of a contract let by the United States of America or any agency thereof, any state or any other political subdivision or district therein if such contract was let to the lowest responsible bidder or on the basis of best value….
At the time of its adoption in New York, piggybacking arrangements were widely permitted in 48 other States. Its widespread use has led to the development of purchasing cooperatives and other arrangements to facilitate the process. Piggybacking, however, does have its limits, as recently held in a May 21, 2026, opinion and decision from the Appellate Division, Third Department, in Daniel J. Lynch, Inc. v. Board of Education of the Maine-Endwell Central School District.
Legal Challenge to Using Piggybacking for Capital Project Work
In 2023 and 2024, the Maine-Endwell Central School District entered into two piggybacking contracts facilitated through a cooperative purchasing agency created by the State of Texas, known as The Interlocal Purchasing System or “TIPS”. The contracts involved the performance of construction work as part of the district’s capital project, including replacing a sewer line and construction of a new parking lot as part of phase 1, and certain HVAC work, demolition, and other construction as part of phase 2. While the project was underway, a group of construction contractors and taxpayers filed a CPLR Article 78 proceeding to challenge and set aside the piggybacked contracts as unlawful, arguing that piggybacking a public works project was not permissible under General Municipal Law § 103(16). The trial court in Broome County agreed and enjoined the district from using piggybacking for future public works contracts, prompting the district to file an appeal.
On appeal, the Appellate Division, Third Department, analyzed the statutory language and legislative history underlying the adoption of the piggybacking amendment in New York. It agreed with the trial court, holding that piggybacking could not be utilized for “public works” contracts. The court observed that the piggybacking exception was narrow and that the Legislature limited the public bidding exception to the procurement and purchasing of specified items and services related to those specific items. “[T]he Legislature contemplated that the piggybacking provision would be used to facilitate procurement in the context of purchase contracts, as opposed to construction and renovation projects like the one at issue.”
Practical Implications and Takeaways
In light of the appellate court’s decision, government entities and school districts in New York should be cautious when utilizing piggybacking and be mindful of the limitations on capital projects and otherwise more generally. School districts with recent or pending capital projects that utilize or intend to utilize piggybacking arrangements should also contact the State Education Department to confirm its position on funding and aiding those piggybacking arrangements. We understand the State Education Department is currently evaluating the Third Department’s decision to determine its impact. Notably, the Appellate Division’s decision leaves open some undecided questions and ambiguities.
First, the General Municipal Law does not contain a statutory definition of “public works.” The appeals court observed that the lower court had defined public works as “construction or repair projects undertaken by municipalities on their infrastructure.” That court drew its interpretation from General Municipal Law § 101(1) entitled “Separate Specifications for Certain Public Work,” which applied to the “erection, construction, reconstruction or alteration of buildings.” The Appellate Division, however, did not endeavor to clearly define the differences or draw the line between “public works contracts” and purchase or procurement contracts that may include “services related to the installation, maintenance or repair of apparatus, materials, equipment, and supplies,” which may be purchased through piggybacking. That line can become blurry at times with capital projects, especially where certain types of goods and things may be separately identifiable from the actual construction or renovation work on a building, but when installed, might be viewed as parts of the building or infrastructure.
Second, the appeals court did not address the consequences of improper piggybacking to either the school district or the contractor involved in the piggybacking arrangement. The relief granted in the lower court was a prospective ban on future piggybacking of capital projects, a discretionary decision because the work was nearly half completed by the time the matter came before the court, and perhaps because there was no prior legal precedent. Other courts may fashion different remedies if a piggybacked contract is nullified as unlawful, which may have further-reaching consequences to the parties.
Governmental agencies utilizing piggybacking, regardless of the substance of the contract, should also ensure that they conduct appropriate due diligence when evaluating the underlying contract to be piggybacked for compliance and satisfaction of three primary and additional criteria: (1) the underlying contract to be piggybacked must have been let by the federal government or a state or political subdivision or district thereof, not a private entity; (2) the underlying contract contains terms expressly making it available to other governmental entities; and (3) the underlying contract must have been let to the lowest responsible bidder or on the basis of best value, consistent with the intent and principles underlying General Municipal Law § 103. In many instances, consultation with counsel may be appropriate to ensure these prerequisites are met before entering into a piggybacked contract.
If you have questions about the implications of the Maine-Endwell decision on your district or its pending or future capital projects, or for more information or questions about piggybacking or public bidding more generally, contact Jason E. Markel (716.848.1395) or Jeffrey A. Swiatek (716.848.1449), or other members of the firm’s Construction and Education Practices.
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