By: Chandler Barganier, Law Clerk, Sheats & Bailey, PLLC
In Lynch, Inc. v. Board of Education of the Maine-Endwell Central School District, the Appellate Division Third Department, affirmed the Broome County Supreme Court’s decision, holding that General Municipal Law § 103(16) excludes public works contracts from the practice of “piggybacking”.[1] This case stems from a multi-year and multi-phase capital project involving various buildings and facilities of Maine-Endwell Central School District. In the summer of 2023, Phase One was completed by Smith whose work pleased the district enough for it to want Smith to complete HVAC work on Phase Two. In October 2023, the District submitted plans for Phase Two to the State Education Department for review and approval as required by Education Law § 408 and 8 NYCRR § 155.2. Such approval was delayed, and the district decided to hire Smith directly by using cooperative purchasing though The Interlocal Purchasing System (“TIPS”), as opposed to undergoing the competitive public bidding process after approval.
In July 2024, the District awarded the Phase Two HVAC contract to Smith by piggybacking it onto their Phase One contract. Several local contractors later petitioned the court, alleging that they were denied the opportunity to competitively bid on the Phase Two HVAC contract pursuant to the competitive bidding requirements under the General Municipal Law. The Broome County Supreme Court granted petition to the extent of finding that the district’s use of TIPS constituted impermissible piggybacking for public works projects. The Supreme Court enjoined the district from using TIPS or any similar process to award further public works contracts and allowed Smith to complete their HVAC work without penalty as their work was already almost halfway complete.
The Third Department upheld the lower court ruling emphasizing that cooperative purchasing is a narrow exception under General Municipal Law§ 103 (16), not a substitute for the required competitive bidding process that governs public works contracts. The court went on to state that it was contemplated by the legislature that the piggybacking provision would facilitate procurement in the context of purchase contracts as opposed to construction and renovation projects.
Though in this case the court declined to impose disgorgement largely because the project was nearly halfway completed, that may not always be the case. Penalties to contractors for violations of competitive bidding requirements may be imposed at the Court’s discretion. While government agencies bear the burden of adhering to competitive bidding requirements, contractors bear the financial risk when these requirements are violated. The potential for disgorgement makes it important for contractors to exercise due diligence during the procurement process to safeguard their financial and legal interests.
Going forward cooperative purchasing cannot be used to avoid competitive bidding for public works. Public entities should exercise caution when considering using cooperative purchasing/piggybacking for construction related projects.
Contractors who perform work on public works contracts in violation of competitive bidding laws potentially face significant financial risks including the possibility of forfeiting all compensation received under an improperly awarded contract. Therefore, contractors should be aware of how the project was awarded and should not blindly rely on the public entity’s procurement process. Contractors should verify the scope of the work and if the public entity correctly followed competitive bidding laws before entering into a contract and performing work.
If you need further assistance or have additional questions, please contact Sheats & Bailey, PLLC. www.TheConstructionlaw.com; Tel. 315-676-7314.
The information provided above is not intended to serve as specific legal advice for any particular situation. Competent legal and experienced counsel should be consulted.
[1] Daniel J. Lynch, Inc. v Bd. of Educ. of Maine-Endwell Cent. School Dist., 2026 NY Slip Op 03209 [3d Dept May 21, 2026]