Article by: Michael F. Higgins
Procurement by municipal entities and school districts is generally governed by the competitive bidding requirements of NY General Municipal Law (“GML”) §103. As discussed in the fall 2025 issue of this newsletter, piggybacking arises from an exception to the competitive bidding requirements under GML 103. “Piggybacking” allows a governing entity to streamline the bidding process by contracting with a provider that has a successfully bid public contract with another governmental entity. In short, one public entity can make purchases and obtain certain services by “piggybacking” on a contract already let and awarded by another public entity, thereby avoiding the usual competitive bidding requirements of NY Gen. Mun. Law 103. A number of public entities have been stretching this exception to procure services normally viewed as construction work.
In a closely watched appeal, a New York appellate court has confirmed that “piggybacking” is not permissible to avoid competitive bidding on public works contracts.1 The unanimous decision by the Appellate Division, Third Department, significantly narrows the previously growing practice of letting public works projects to contractors who had an existing successful bid on a different project.
Piggybacking remains permissible for the purchase by public owners of “things” and related service contracts as opposed to “public works contracts.” The court defined “public works contracts” as “construction or repair projects undertaken by municipalities on their infrastructure.” The appellate court affirmed that a non-competitively bid contract for HVAC renovations and classroom construction was an impermissible use of piggybacking in violation of New York’s competitive bidding laws.
A public entity may still utilize piggybacking for the purchase of “things” which are defined as “apparatus, materials, equipment or supplies” or “to contract for service related to the installation, maintenance or repair of apparatus, materials, equipment and supplies.” What is now clearly prohibited is using piggybacking in lieu of bidding for major capital improvements. Yet, the line between a permissible piggybacking purchase and a public works project that must be bid is not clearly defined. That ambiguity provides significant risk to suppliers and public owners considering piggybacking.
It appears that public owners may test the limits of piggybacking by attempting to utilize piggybacking for providing materials, equipment or supplies within a capital improvement contract. After the conclusion of this lawsuit, the New York State Department of Education issued clarifying guidance to school districts which noted that piggybacking could still be used “to purchase physical commodities or equipment” in an overarching capital construction work if the project is independently and competitively bid. In other words, the Department has seemingly approved direct purchase of items by a District via the piggybacking sourcing, but such direct purchases still run the risk of being construed as part of the capital improvement contract as opposed to strictly for the purchase of “apparatus, materials, equipment or supplies,” especially with incidental services related to “installation, maintenance or repair.”
In this specific case the court determined that the scope of “purchase” easily fell outside the permissible scope of piggybacking because it included such activities as general construction, plumbing, electrical and HVAC scopes of work for a total value of $8.9 million. Yet, smaller scopes of work may still blur the line between a “capital improvement” and the mere purchase and installation of equipment. Suppliers and vendors considering supplying goods through a piggybacking arrangement are cautioned that they face the risk of disgorgement of payments if a court later determines that the contract was not permitted under piggybacking and violative of competitive bidding law.
The use of piggybacking is further complicated by New York’s statute regarding prevailing wage requirements for custom manufacture or prefabricated components for public improvements. See nearby article. While this law, passed at the end of 2025, is currently stayed during a court challenge to its validity, it remains important for a municipality considering piggybacking to determine whether a direct purchase contract might also need to comply with prevailing wage requirements (in the event the pending court challenge is unsuccessful).
The expanding use of the piggybacking exception to competitive bidding was unquestionably reined in and narrowed by the recent appellate court ruling. The question remains how narrow the remaining exception to bidding may be. Without further guidance, significant ambiguity and risk remains for owners, contractors, or suppliers considering participating in a piggybacking arrangement.
- Daniel J. Lynch, Inc. v. Bd. of Educ. of Maine-Endwell Cent. Sch. Dist., No. CV-25-0422, 2026 N.Y. Slip Op. 03209 (3d Dept May 21, 2026)
