Rising Use of “Piggybacking” in Capital Projects – Protecting Your School From Legal Challenges

In 2012, the New York State legislature authorized a new purchasing method to streamline competitive bidding procedures in certain circumstances. This purchasing method allows schools to “piggyback” on certain contracts previously entered into through competitive bidding by other governmental agencies.

What is “Piggyback” Purchasing

Piggyback purchasing is a purchasing method enacted with the stated purpose of reducing administrative and product costs and increasing efficiencies. Piggyback purchasing must be authorized by resolution of the Board of Education and the school’s purchasing policies.

Piggyback purchasing may be used only to purchase items falling in one of two categories:

1. apparatus, materials, equipment or supplies, or
2. services related to the installation, maintenance or repair of apparatus, materials, equipment, and supplies.

This purchasing method allows schools to “piggyback” on contracts of other governmental agencies which were already let in a manner consistent with competitive bidding requirements. Simply put, schools may utilize a contract of another governmental entity, without themselves engaging in the time and effort to let the contract pursuant to the competitive bidding process.

Capital Projects – Due Diligence and Avoiding Legal Challenges

In recent years, the use of piggybacking has increased exponentially in schools’ capital projects. There are several legal considerations when using this purchasing method for capital projects. It is important that school administrators carefully evaluate potential piggyback purchases with the architect, construction manager and legal counsel at an early stage to confirm lawful use of this purchasing method.

While piggyback purchasing can be a cost and time efficient purchasing method, there are pitfalls which can subject the purchase to legal challenge.

When considering piggybacking in capital projects, schools should verify the piggyback contract was bid in a manner consistent with New York law and confirm that piggyback purchasing requirements are satisfied. This includes verifying the piggyback contract’s lawful bid advertising, bid evaluation, and bid solicitation. The school should require the Architect to confirm that each item in the contractor’s proposal is an item included in the scope of the piggyback contract. The Construction Manager should be required to review and verify that the contractor’s proposal is priced at or below the amount required by the piggyback contract. If school districts are considering piggyback purchasing work in conjunction with a capital construction project, the contract should be in an AIA form vetted by legal counsel. Contractors should be required to provide a certificate of insurance and payment and performance bonds in compliance with the AIA contract.

If you would like assistance in evaluating use of piggyback purchasing in your capital project, including ensuring that all preliminary requirements are met, contact Jeff Lewis at jmlewis@ferrarafirm at one of the telephone numbers listed below.