There, a court struck down piggybacking as applied to public construction projects on the grounds that piggybacking applies to things and not construction services. We wrapped up our article with the proverbial “stay tuned”, anticipating an appeal. That appeal was taken, and the Appellate Division affirmed that the statute cannot be read so broadly as to effectively permit the letting of public works contracts without submitting them to public bidding.

Background – by way of reminder, in December 2022, the District’s voters approved a bond to finance various improvements in six phases over five years. In July 2023, instead of using bidding under Section 103, the District entered into a “piggyback” contract with The Interlocal Purchasing System (“TIPS”) to undertake Phase One (replacing a sewer line and installing a new parking lot) for $2.5 million. TIPS has grown into a national clearing house to match municipalities with contractors who have joined the program. Once subscribed, a municipality submits its project specifications and TIPS matches the municipality with a contractor. Once the match is made, the parties negotiate the agreement incorporating pricing provided by the TIPS contractor. Here, TIPS matched the District with Smith Site Development.

The District was pleased with Smith’s work, and it inquired of its CM whether Smith could handle Phase Two (extensive HVAC renovations for $8.9 million). The CM indicated that Smith could, and the District began negotiating with Smith, through TIPS, to perform Phase Two. The District ultimately awarded that contract to Smith. In response, several local contractors commenced an Article 78 proceeding to declare Smith’s contract void, arguing that the piggybacking arrangement violated state law in numerous respects, including the failures to solicit public bids, comply with the Wicks Law and mandate bonds. In response, the District argued that piggybacking was not only permitted, but encouraged by Section 103(16), and that both the District and the TIPS system complied with the requirements set forth in that statute.

The court declared the piggybacking arrangement void. In doing so, the court conceded that it was hampered by the statute’s failure to define public work projects. The court was ultimately able to use definitions from related statutes and held that such meant “construction or repair projects undertaken by municipalities on their infrastructure that are subject to the competitive bidding process.” With that definition, the court held that the piggybacking exception applies to the “purchase of specific classes of things, namely apparatus, materials, equipment and supplies, as well as service contracts related to those specific things” and not to public works contracts or projects. Accordingly, the court held that the legislature excluded such projects when it drafted the piggybacking exception, and the contract here was improperly let.

As to the remedy, although the Petitioners had sought disgorgement of the funds paid, the court declined to grant that draconian relief, holding that such would not be in the public interest. In doing so, the court noted that there were no allegations that the project was being performed inefficiently or in a manner injurious to the taxpayers, and the District was not malfeasant in letting the contract to Smith. Accordingly, the court permitted Smith to complete its work, but enjoined the District from using TIPS (or a similar system) to bypass public bidding in the future. Both the District and Smith appealed.

Decision – the appellate court affirmed the injunction against using TIPS to bypass public bidding to award future public works contracts. In doing so, the appellate court, in interpreting the statute, noted that the legislature could easily have identified public works contracts as being subject to the piggybacking provisions, but declined to do so. In that regard, the court found that the legislature specifically “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.”

As to Smith, the appellate court dismissed its appeal, noting that it was not aggrieved by the motion court’s decision because Smith was neither forced to cease work, nor disgorge the monies it received (essentially, Smith wasn’t harmed by the decision). As to Smith’s more pressing argument, that the court’s decision would affect its future business dealings, the court held that the claim was not only speculative, but even if true, such did not give it a right to appeal.

Comment – the appellate court affirmed the limitation of the use of the piggybacking scheme to, essentially, “plug-and-play” things that only need minor work to install and get running. If it involves anything more, it is classified as a public works project that must be sent out to bid. While the public bidding process—particularly when combined with the Wicks Law requirement to let separate contracts—can be cumbersome, the countervailing considerations of bidding for maximum competition, reducing collusion, and the maintenance of bonding requirements won the day with both the motion court, and now the appellate court.

About the authors: Thomas H. Welby, Esq., P.E., is General Counsel to the CIC and the BCA, and founder and Senior Counsel to Welby, Brady & Greenblatt, LLP. Gregory J. Spaun, Esq., is General Counsel to the Queens and Bronx Building Association and a partner with the firm.

Published: June 18, 2026.