Fidelity just lost a big contract with its own state. The Massachusetts treasurer has awarded Federated Investments the $9.5 billion Massachusetts Municipal Depository Trust contract, which Fidelity has held for 35 years, reports Beth Healy of the Boston Globe.

Massachusetts treasurer Steven Grossman says the switch will save the state a total of $8.2 million over three years. It's a three-year contract with an option for two one-year extensions, and this is the first time it has been put out to bid since 2005.

Fidelity spokesman Vin Loporchio expressed disappointment. “For 35 years, Fidelity has delivered on our commitment to MMDT in delivering a competitive return and service in line with the state’s expectations and guidelines," he said.

As treasurer, Grossman has made a name for himself cutting costs on state contracts. He said that savings, not performance, was the reason for the move.

“You need to acknowledge that Fidelity’s done a superb job," he said. "The service and the quality have been outstanding."  

Edited by: HFD


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