TALLAHASSEE-Savings to participating credit unions from the League of Southeastern CUs' vendor contract management and procurement service is approaching $1.6 million, thanks to a reverse auction ePurchasing buying platform that often saves credit unions 40% on a vendor contract.
Ventelligence has been in place since 2008, but it wasn't until 2010-after the recession-that credit unions really began taking advantage of the service that reaches across Alabama, Florida, and now Pennsylvania. The Pennsylvania CU Association recently signed on to offer Ventelligence, provided by LEVERAGE, the LSCU service corporation.
"Vendors get specifics on the work needed, and then we go through a reverse auction online," explained Marvin Garland, LEVERAGE COO. "The vendors can see all the bids coming in and they have the opportunity to lower their price before the auction expires."
Auctions generally run less than an hour and CU participants can watch bids being submitted as well. "At the end of the day credit unions have the option to choose the lowest bidder or go with one of the other vendors," said Garland.
CUs sign up for the auction and then log onto a website through Leverage. Not only are contract prices lower than what a credit union could normally negotiate on its own, but the amount of time and resources a credit union spends choosing a vendor is dramatically reduced, explained Garland.
"Many times a credit union does not have all the time it needs to spend on a vendor search, review, and RFP. We handle that end, do the due diligence, with an emphasis on NCUA-identified risk areas. We do not risk rate vendors, but educate credit union on how to do that. From start to finish, determining vendor services needed, getting enough credit unions on board for an auction, securing vendors, and then running the auction can take as little as 30 days. That's a big time savings."
The first time a credit union secures a contract for a specific service through Ventelligence Garland says the typical savings is 20%. "It is not unusual to see 40% savings, and we have saved credit unions as much as 80%."
Nearly 100 CUs Now Involved
The type of contracts returning the most savings, Garland pointed out, are armored car services (40% to 50%). "Janitorial services have brought sizeable savings too." Other areas big on savings have been form statement printing, software, and PCs and printers.
Nearly 100 CUs are currently using Ventelligence. Charlton Knowles, CEO of the $70-million Buckeye Community FCU, Perry, Fla., said the CU began using Ventelligence and ePurchasing in 2010. "The bids that come back are considerably lower than what we had been paying. The live competitive bidding really works to get the bids down. It saved considerable time and we saved about 40% from what we had been paying."
The $150-million Innovations FCU in Panama City, Fla., used the service for an armored car contract. "By utilizing ePurchasing we reduced our annual expense for cash delivery services for at least two years," said COO Scott Gladden. "We saved in excess of $20,000 per year, or more than 50% from the previous contract."
