(Reuters) – The Pennsylvania Treasury said on Wednesday it will save 36 percent on bond counsel services because it selected a law firm through a competitive bidding process for the first time.
The department, which issues general obligation bonds about twice a year, “did not select bond counsel simply based on relationships,” Acting Pennsylvania Treasurer Christopher Craig told Reuters by telephone. “We applied very objective criteria involving experience, competencies and cost.”
The Treasury selected the Philadelphia-based firm Saul Ewing as bond counsel for its next GO deal, expected by the end of the fiscal year, to refinance existing debt and fund transportation projects and capital improvements.
Some other states and authorities already use competitive bidding to select bond counsel, as recommended by the Government Finance Officers Association.
When Pennsylvania Governor Tom Wolf took office in January, he called for more bidding of legal services, Craig said. Treasury, an independent state department, determined there is “value in doing it, particularly for this type of transactional work,” Craig said.
Based on the Treasury’s prior formula, the same services that will now cost about $85,000 would have cost about $131,000, he said.
Saul Ewing, which has also served as bond counsel in the past, was among 25 firms prequalified to bid, 17 of which submitted responses.
(Reporting by Hilary Russ in New York. Editing by Andre Grenon)