Countywide : Swap-Meet Bidder Alleges Illegalities

One of the unsuccessful contenders for the lucrative swap-meet contract at the Orange County Fairgrounds has filed a lawsuit charging that the bidding process was illegal.

Orange County Flea Market Inc., headquartered in San Jose, alleges, among other things, that competitors gained unfair advantage by receiving inside information.

The Orange County Fair, the three state agencies that oversee the fair and Tel-Phil Enterprises Inc., longtime operators of the swap meet which won the contract in February, were named as the defendants.

The defendants “misled certain bidders with regard to the actual scoring criteria” and had “unlawful, prejudicial communications prior to the award with certain bid proposers,” according to the suit, filed in Orange County Superior Court. The defendants, the lawsuit contends, further “otherwise exhibited improper favoritism” to the detriment of Orange County Flea Market Inc. and other bidders.

John Dratz, deputy attorney general with the state’s attorney general’s office, representing the Orange County Fair, denied the allegations and said the process was completely aboveboard.

“I don’t think (the suit) is meritorious,” said Dratz. “I have been the attorney all the way through. We have tried to keep the playing field as fair as possible, to notify all the players what the rules are.”

Dratz added that the lease with Tel-Phil has not officially been awarded, pending routine approval with the state Department of General Services and the Division of Fairs and Expositions.

Tel-Phil, which has operated the swap meet for 22 years, beat out seven bidders. A selection committee appointed by the fair board made its recommendations after scoring the bidders on their experience running swap meets, financial stability and their proposals for running the Orange County Marketplace.

The lease gives the 32nd Agricultural District, which oversees the fairgrounds, 51% of gross revenue from food and beverage sales, including beer and wine, and 38.4% of revenue from renting sellers space.

After the award was announced, three rival companies--Orange County Flea Market Inc., KBH Outdoor Markets, and Marketplace Management Inc.--protested, asserting that the selection process was flawed. However, a subsequent state review reaffirmed the decision to award the lease to Tel-Phil.

John Murphy, one of the attorneys representing the Orange County Flea Market, declined comment on the specifics of the suit, saying only that they would “pursue the lawsuit vigorously.”