A consulting firm hired by the Legislature to review the state Department of Transportation has developed 13 recommendations to improve the agency's operations, management, communications, employee retention and other areas.
If all the recommendations are implemented, they would produce an estimated $36.2 million in both one-time and annual savings for the department, according to a presentation executives from Guidehouse LLP of McLean, Va., made Wednesday before a legislative panel.
The Guidehouse report on the recommendations said the agency already was implementing elements of some of the recommendation while others will require unspecified upfront costs.
Lorie Tudor, the director of the Transportation Department, welcomed the report.
"We opened up the hood for them and we showed them everything -- our challenges, what wasn't working, what was working, where we needed to improve," she said. "We feel like this is a really good evaluation of the department. We also know there's always room for improvement for an agency of our size. This is a good report, and it's going to be a good tool going into the future."
The recommendations were divided into six categories: organizational structure, portfolio planning, procurement, expenditures, information technology and people capabilities. Many of the recommendations, however, had to do with making the department's data more widely available.
The organizational structure recommendations included fully developing key performance indicators beyond the performance indicators already in place for managing and preserving the highway system. The report noted that nine of 10 comparison state transportation agencies maintain a performance scorecard not exclusively tied to system condition.
Fully developing key performance indicators will result in greater transparency and accountability to the public at large as well as help lawmakers in making policy and budget decisions, the report said.
Another recommendation was to widen knowledge of department policies and procedures among employees to mitigate the loss of institutional knowledge through turnover and retirement. Turnover has risen to 9% in recent years while 26% of the agency's workforce of 3,700 is eligible for retirement over the next 10 years.
Under portfolio planning, the report recommended improving the dissemination of the status of construction projects and maintenance activities to increase public visibility and accountability. The agency's existing communication is "disjointed and difficult to navigate," the report said.
At the same time, the agency must improve its customer service, which would include making the information more readily accessible. The report pointed to 311 call centers operated by Philadelphia and Portland as models and noted that six state transportation agencies measure customer service and responsiveness.
Under procurement, the report recommended implementing efficiencies in procurement and purchasing, which studies show can yield 5% to 20% savings in expenditures. In the department's case, that could save the as much as $7.1 million, the report said.
The report also recommended the department track contractor performance with an objective scoring system that allows contractors to improve or appeal their scores. Now, it's limited to banning contractors from bidding on projects if they have missed a deadline on projects.
Under expenditures, the department should enhance its existing systems to manage pre-construction, construction and maintenance phases of the agency's work, which could save the agency $3.82 million a year, and implement leading practices in construction project design, which could yield up to $15.8 million in savings.
Information technology was addressed in three recommendations, which included developing a technology governance structure to guide information-technology investments, implement midterm initiatives to optimize business operations and develop information technology as an effective partner within the department.
To increase retention and reduce turnover costs, the report said the department should develop career ladders, identify roles at high risk of turnover, conduct a compensation study and publicize career, skill and salary progression. Only half of the agency employees agree that they can advance their careers at the agency, according to a Guidehouse survey.
The report also recommended strengthening employee training programs, which could lead to improved job satisfaction and retention and increased productivity.
"We ... believe that a lot of what they recommended we already are working towards," Tudor said. "It just emphasizes to us that we're going in the right direction because from what they were saying, we were already going down that path and they used it as a recommendation so that gives us confidence."
The department just signed a contract for $60,000 to develop a new website.
"It's going to make it a lot more user friendly for the public -- so that anyone that's interested in highway projects can easily find information. Right now it is hard to find information on projects," Tudor said. "We've made strides with iDriveArkansas ... but we are redesigning in main website and it will make it a lot easier and I think that's going to be the biggest thing that the public sees that will be helpful to them."
Which Guidehouse recommendations will be adopted will be decided in a series of meetings the Highway Commission Review and Advisory Subcommittee of the Arkansas Legislative Council will hold in the coming months.
Guidehouse is working under a contract for up to $722,463 with the Bureau of Legislative Research through Dec. 31 to study the department's.
"There are some ideas we hadn't thought of -- a couple we're going to implement that we think are great ideas," Tudor said. "It's a great report. It will be a great tool for us and we appreciate the Legislature paying for it and having it done. It was a heavy lift. It took a lot of time and effort, but I think it's well worth it."