Saunders, 30, was 12-13 with a 3.69 ERA in 212 innings last year with the Arizona Diamondbacks, who did not tender him a contract this offseason.
Saunders would have been in his final year of arbitration this offseason but now is a free agent and has been linked to several teams — with varying degrees of interest — including the Florida Marlins, Boston Red Sox, Colorado Rockies, Cincinnati Reds and Detroit Tigers.
Clubs have been waiting for Saunders' contract expectations to come down before his market fully heats up, another industry source said.
Orioles executive vice president of baseball operations Dan Duquette does not comment on negotiations with specific players but reiterated that the Orioles "need pitching" and that the club would have interest in a free agent such as Saunders because he is "an accomplished major league pitcher."
The Orioles continue to pursue at least one more starter via trade or free agency, with the best on the open market being 28-year-old right-hander Edwin Jackson, who excelled with the St. Louis Cardinals (5-2, 3.58 ERA in 13 games) in the final two months of 2011.
Jackson's upside intrigues the Orioles — and plenty of other clubs — and he'll likely get at least a four-year deal, which both Duquette and the Orioles have been hesitant to do in the past for a free-agent pitcher.
Saunders surely will be less expensive than Jackson and probably will garner only a two-year deal, though the team that offers three years may be in the best position to land the dependable but unspectacular left-hander.
A first-round pick out of Virginia Tech by the Anaheim Angels in 2002, Saunders is 69-52 with a 4.16 ERA in 161 starts over the past seven seasons. He is a Northern Virginia native; he was born in Falls Church and grew up in West Springfield.
He also would give the Orioles another innings-eater to join veteran right-hander Jeremy Guthrie. Saunders has thrown 186 or more innings and made 31 or more starts in each of his past four seasons. A soft-tosser, Saunders, however, is prone to giving up the long ball. He has allowed 25 or more homers in each of his past three seasons.
Although the Orioles have already potentially added two left-handers to their rotation after signing Japanese southpaw Tsuyoshi Wada and trading for journeyman Dana Eveland, Duquette has not ruled out acquiring another lefty.
The Orioles are one of roughly six teams that have shown consistent interest in Taiwanese lefty Chen Wei-yin, a 26-year-old who pitched with the Chunichi Dragons of Nippon Professional baseball before becoming a free agent this offseason. Chen's MLB decision does not appear to be imminent.