Among these narrow exceptions in Section 103 is contained in Paragraph 16 of the statute, which provides that notwithstanding the general provisions of the statute, a municipal entity may “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” by “piggybacking” onto a “contract let by the United States of America or any agency thereof, any state or any other political subdivision or district therein,” provided that such contract has, itself, been publicly bid consistent with the statute.

In the recent case of Daniel J. Lynch, Inc. v Maine-Endwell Central School District, a court held that the statutory language permitting piggybacking for services related to the installation of equipment could not be read so broadly as to effectively permit the letting of public works contracts without submitting them to a full public bidding process.

Background

In December of 2022, the district’s voters approved a bond to finance various improvements at the district’s schools. This project was to be carried out in six phases over five years. In July of 2023, instead of using the bidding process set forth in the General Municipal Law, the district entered into a “piggyback” contract with The Interlocal Purchasing System (TIPS) to undertake phase one of the project (replacing a sewer line and installing a new parking lot at the high school) for $2.5 million. TIPS was created by the State of Texas and has grown into a national clearing house to match municipalities around the U.S. to contractors who have joined the program.

Once subscribed to TIPS, a municipality submits its project specifications, and the TIPS system matches the municipality with a contractor who can handle the project. Once the match is made, the parties negotiate the agreement, which incorporates the pricing provided by the TIPS contractor. Here, TIPS matched the district with Smith Site Development LLC.

The district was pleased with Smith’s work on phase one, and it inquired of its CM whether it believed that Smith could handle phase two of the Project (extensive HVAC renovations at one of the elementary schools for $8.9 million). The CM indicated its belief that Smith could handle the work, and the district began negotiating with Smith, through TIPS, to perform Phase Two. The district ultimately awarded the 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 failure to solicit public bids, the failure to let separate contracts for the Wicks Law trades, and the failure to mandate bonds.