ALC-Highway Commission Review and Advisory Subcommittee
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Speaker 1
0:00
Do you have any comments? No, sir. Okay. First order of business, I do see a quorum. My first order of business is a report from the Arkansas Highway Commission on the progress of each public road construction project of $10 million or more, as required by 27-65-107. And it looks like Mr. Randy Ork is here to do that
Speaker 3
0:22
for us, so the floor is yours, sir. All right. Thank
Speaker 4
0:26
you, Mr. Chair, committee members. I am Randy Orton. I'm the Assistant Chief for Administration for the State Department of Transportation.
Very happy to be here today. I send regrets on behalf of our Director, Scott Bennett. I think he'd rather be here today, but he's at an Executive Committee meeting out of state for the Transportation Research Board. I would like, before I get started, to recognize we do have one member of the Highway Commission with us today, Vice Chairman Robert Moore. There he is. of Arkansas City, Vice Chairman of the Commission, former legislator, former Speaker of the House. So thank Mr. Moore for being here with us today. I'm going to keep it pretty brief today.
You should have before you the quarterly report that we provide. This shows information on all the contracts that we currently have in force or scheduled that have a price tag of $10 million or more. There's 30 projects in your report. That's out of about 150 contracts we have in force right now. But these are the big ones. These are the ones that we're required to report on quarterly. Before I get into taking questions about that, I'd like to have a little
bit of follow-up real quick from the last meeting that we had in May. We had a question posed by your co-chair, Senator Dismang. If you look in the report, at the summary progress reports, if you look at the original contract amount, and then you look at the contract amount as the project is underway sometimes it looks like every contract we have grows and gets larger and that's because of change orders and things that happen that actually change the contract amount and so the question was asked of Director Bennett in May is that true do all contracts grow
and and over time how much do you end up paying for those contracts versus what the original contract amount was and the director off the top of his head replied at that May meeting that it really washes out over time. But we were asked to provide some documentation to that effect. I didn't want to go and throw a whole bunch of data, a whole bunch of numbers on the screen, so I summarized it for you and what you see on the screen. But if you look at the last 10 years, contracts we have finalized, contracts we have finished, these are projects that are completed.
That's over 2,300 projects we've completed in the last 10 years, totaling over $5.5 billion. As you can see on the screen, the original contract amount for those projects was $5.5047 billion. We actually ended up paying $5.5173 billion for those. that is an overage over 10 years and 2,300 projects of approximately $12.6 million, which is an overage of 0.23%. And we feel like that is a very, very, very acceptable range for
numbers of that magnitude. As a matter of fact, if you shorten it up and just looked at the last five years, about half the number of projects, about $3.3 billion worth of work, we are actually 0.25 percent under what we paid to the contractors is under what the original contract amount was that's about 8.3 million under over that five-year period of time so I hope that satisfies those questions of course we'll be happy to take any questions if you don't understand or need some more information on that yes sir and so just for the members and so what
Senator Jonathan Dismang
Unverified
3:55
we were looking at is if you look in just the progress uh quarterly report and you flip over and any one of these projects you see a contract bid amount that would have been the starting amount and the second amount would be the current contract amount and you know there was usually a difference between those two and my understanding the report that they're presenting that that those amounts actually over time the difference between those two washes out and so that there's actually if you just did five years it would have been an 8.3 million dollar difference between the contract bid amount and the actual contract amount that was paid. Correct. Thank you. Any other questions?
Speaker 4
4:34
All right. The other thing that we did that we have done since the May meeting, you asked for a little bit more information. A lot of times on the progress summary reports it shows time changes, it shows monetary changes, and we kind of leave it up to you all to ask us questions to explain that. But we were asked to put some brief explanations in there if you look on page 19 of the report i can give you an example job bb 0203 in jefferson county on interstate 530 you'll notice that the contract bid amount on that particular job is 67.3
million current contract amount is about 70.5 million you'll also look down and see the original estimated completion date was may of 2019 and we have a current estimated completion date of late 2019 so on projects like that that we feel like there is something significant that may generate a question we put a note down at the bottom you'll notice the bottom of the page in red we have an explanation for the contract contract time extension in this case 125 days because of some very poor subgrade that the contractor found when the payment was removed also we added the
cost because some of those remediation things that had to be done so hopefully you'll see as you go through this report those explanations might help alleviate some of the questions we have for this meeting so having gone through all that now i'll be happy to take questions on anything we
Speaker 13
5:57
have in the report or anything else any questions from the committee i guess no questions having said that it's
Speaker 12
6:14
been a pleasure good meeting appreciate it and i'll
Speaker 4
6:18
uh logan county i know all right thank y'all very much we'll move on to the next agenda item next
Speaker 19
6:38
item we have up is a update from guide house if they would like to come to the
Speaker 1
6:59
table also to the members they're going to do our presentation today on their their project
plan stuff uh any members that that might have a different view or different changes or anything about what we're going to discuss today uh be sure and get those to jill and uh and uh just you know be be sure you don't contact the uh guidepost uh guide house guidepost excuse me guide house directly uh get any of your comments to jill and then she will bring them to the to the chairs and then we will use that avenue uh if you'd like to introduce yourself
Sagar Gokhale
Unverified
7:41
hi my name is uh well good afternoon everybody my name is sagar goklee i'll be the project manager on this review of the
Speaker 25
7:50
department of transportation Good afternoon, chairs and members. I'm Erin Hutchins. I'm a director with GuideHouse. Is your mic on? It looks
Speaker 27
8:03
like it's on. The green light is on, but maybe not. Okay. I've never been accused of being quiet. Sorry.
Speaker 32
8:13
Still can't hear it. Okay. Oh, okay. Sorry. Hi. i'm aaron hutchins chairs and members i'm a director with guide house also participating on this project thank you so
Sagar Gokhale
Unverified
8:29
thanks for having us typically when we start a project like this we like to hold a kickoff meeting for a few reasons one primarily to really agree and align on what the true priorities and focus areas are for our review talk a little bit about our
deliverables and scope uh talk at a high level about our project timeline and then discuss next steps but really the primary
focus is really to agree and align on our focus areas and that's where we're going to spend most of
our time this afternoon in our presentation and then subsequent to that once we've sort of aligned on what those focus areas are going to be we'll start to develop a comprehensive project work plan which we hope to present at the next subcommittee meeting in in about a month, so that you all can take a look at it,
approve it, and we'll continue on in terms of our review. That project work plan session doesn't stop our work. We'll start moving on it, as you'll see in our timeline, and as we'll talk about in a little bit. But we want to make sure we have that comprehensive plan in front of you. And this is really the first step in that process. So again, in terms of our agenda, we'll talk about focus areas, project scope, timeline, and then some of our next steps.
If we move to slide three, this is really where we start to talk
a little bit about our focus areas. And the way we frame this out is really in terms of thinking through the core functionality of a Department of Transportation. And if you think about the lifecycle, generally follows from what we've seen three phases. So there's portfolio planning, then there's procurement, And then there's capital expenditures or construction, which is the build piece, and then operations and maintenance.
And so we primarily would like to focus on those three areas. And specifically, from a portfolio planning standpoint, we're going to do a deep dive on a number of sub-areas and subsections beyond that or below that, the first being funding and allocation. So what we're trying to understand through this sort of review is understanding the different funding sources, how they're segmented, what are the requirements, and then how those funding amounts are then allocated throughout the department and at the district
level. We also want to understand how needs are identified through
some sort of formalized protocol around a needs assessment. So how are those needs identified? How are they scored? How are they potentially weighted? Because then that factors into potentially an investment policy and process around then how those funds essentially are deployed to execute on the core functionality of the department again so we want to understand you know what is the decision-making protocol around how those funds are invested is that happening at a centralized from a centralized standpoint or
decentralized what's local community input in that process and then ultimately how does that then factor into the decision-making protocol so who's the ultimate authority within the department or the commission or within the subcommittee, for example, as it relates to authorizing the deployment of those funds for the various projects and functions that the department has to execute on. And then finally, there is going to be an area of innovative programming and an agenda around that that might also impact what that portfolio planning looks like and how
funds are deployed. So we're going to seek to understand that as an area of potential efficiencies within the department. Moving from portfolio planning, procurement is a significant portion of any department of transportation's operations. And so what we want to understand right off the bat is what are the policies and rules and regulations that govern the procurement process? And what is the method of execution? For example, is there a design, bid, build philosophy? Is there a design-build philosophy, design-build-execution, or sorry, operation?
Or, you know, how do public-private partnerships play into that procurement process? So I want to seek to understand that in a little bit more detail. Having understood that framework, we want to dig a little bit into process efficiency. So what does the procurement lifecycle look like as it relates to executing on their procurement processes? What happens if there's overruns, and what are the impacts on service delivery if that's the case? We also want to understand how performance of vendors is monitored and managed and tracked and if there are specific incentives as it relates to some of the items that the department
is looking to procure, especially from a capital expenditure standpoint, maybe even from an operations maintenance standpoint as well. We also want to examine a little bit and seek to understand sort of the vendor profiles. So who are the preferred vendors? What are the DBE requirements? What does local vendor involvement look like within the procurement process and as part of the larger capital expenditures projects and even operations and maintenance? Are there interstate agreements? Are there collaborative purchasing agreements?
So we want to understand that full profile of the vendors that are available to the Department of Transportation in executing their projects. And then we also want to understand what the protocols are around change orders. So what are the tolerances as it relates to change orders? And what is the protocols under which a change order is ultimately approved or potentially denied? Then we also want to take a look then at the capital expenditures of the building, new construction. So how is cost managed? How is schedule managed? How are vendors managed?
What does reporting look like? What are the metrics associated with performance of those projects look like? And then how are those reported ultimately to the key stakeholders? We also want to understand as part of those, sort of the build, operate, maintain area of focus, is optimal use of funding. Is the department potentially leaving some funding on the table, or are they completely exhausting and taking advantage of all the funds on the table, especially federal funds? And then we also want to understand how right-of-way and environmental considerations impact project performance from a cost standpoint,
and also a scheduling standpoint as well, and potentially also from a vendor standpoint because they might have major implications, especially as it relates to the actual commencement of any project. And so those are the three large buckets that comprise, at least what we'd like to advance, is comprising our major areas of focus. And as we talk about in the next slide sort of the project objectives, I think those three align with most of them, but there are some other areas that we want to focus in on as well, and those comprise our operating platform. So in the very bottom, there's three
other buckets that we want to take a look at. One is the organizational structure, really to understand, does the Department of Transportation have the appropriate organizational structure to execute on its mission and function, and then ultimately realize its vision? And does it have the right personnel, then, to execute on its mission and its functions? What challenges might it face as it relates to its personnel from an aging standpoint, experience, subject matter
expertise, capabilities, what does training and succession planning look like, and what does employee engagement and support look like throughout the organization, and potentially what are some of the best practices and challenges there. We also want to take a look at the IT infrastructure because that's going to be critical as it relates to the department's efficiency as relates to executing its core processes. You know, we understand that the department has implemented an electronic fleet management system and also an electronic procurement system as well.
So we want to take a look at those IT applications as well as the others that exist within the department to identify some potential short-term efficiencies, but see where there might be some larger, longer-term efficiencies with better use of data analytics and maybe some transparency around some of the the data that they have in-house. And finally, we want to understand the rules and regulations to see to what extent those enable or potentially hinder the operation of the department. And so those those six buckets in totality sort of comprise
the areas of focus that we propose to spend our time on through this engagement. Wanted to understand from from this subcommittee and gain agreement and approval that those are the right areas of focus before we start moving on to our project work plan. MR. We do
Speaker 43
17:10
have one question. MR. Senator Chesterfield, you have a question?
Senator Linda Chesterfield
Unverified
17:14
MS. I think I have my answer. I was looking for a definition of the acronym DBE, but I think it is explained. MR. Yeah, Disadvantaged Business. MS.
MS. So I decided I'd go on the internet and let you finish talking. Thank you. MR.
Sagar Gokhale
Unverified
17:38
Okay. Go ahead. MR. Okay. So on this slide, we really wanted to confirm, you know, the project
scope, talk a little bit about objectives, and then our key deliverables. So as we understand it, the objectives of our review are really to provide an analysis of the department's processes and procedures, procurement procedures, expenditures, and appeal processes.
And we think through the three large buckets from a portfolio planning standpoint, excuse me, from a procurement standpoint, and then also from the capital expenditures, the build, operations, and maintenance, we've addressed or we will address those objectives. identifying leading practices that will help the department optimize its operations and although not specifically an area of focus that you know sort of guy going to guide our review at that
level it's going to be weaved in throughout our review so there's not a specific bucket that would necessarily call that out but you will see it in our recommendation report and I will talk about that in just a second and then identify some operational and regulatory recommendations again from a regulatory standpoint that is going to be a key focus area for us and you're going to see those recommendations in our final recommendation report so we anticipate preparing three deliverables for you all one is the comprehensive project work plan which we hope to have in about a month's time for
you all to review and that's going to be a document that sort of outlines our tasks durations of those tasks responsibilities any dependencies and milestones for our project so that you all are aware of how this project will play out and whether we are on track to successfully deliver our final deliverables. We also anticipate providing a current state report with initial recommendations. So this report is going to synthesize our current state findings, specifically as it relates to gaps in those focus areas, again, from a portfolio planning standpoint, from
a procurement standpoint, from capital expenditures, maintenance operations, organizational structure, personnel, IT rules and regulations. And if there's a need to provide some supporting documentation to substantiate those findings, we'll prepare that. And then at that point, we'll also have an opportunity to identify some preliminary areas for recommendations. But again, they are going to be preliminary. We'll want to reserve the right to have a formalized set of recommendations in the third deliverable, which will be our future state report, roadmap,
and ongoing support. So we're going to issue that report towards the end of the project. It's going to identify recommendations related to what we saw in terms of the pain points and challenges of the department and leading practices in those key focus areas that we talked about. And to the extent that those potentially require legislative updates, we'll want to provide some recommendations there as well. We also plan to develop a high-level roadmap that details how
those recommendations can be executed and some metrics to track the progress should you adopt those recommendations as we've advanced them. And then finally, we're going to provide some ongoing support with drafting legislation and I believe a report that will be of this subcommittee separate from our final recommendation report. thank you what i don't know
Speaker 52
21:10
was he done with his report i'm sorry were you done well i can move on
Speaker 54
21:18
to the next slide if we have questions they have a
Speaker 55
21:20
little more if you want to hold questions till i finish
Sagar Gokhale
Unverified
21:29
i could do that okay that'd be fine good okay perfect moving on to timeline uh slide five presents our high-level timeline. We've broken this out into three phases. Phase 0, which is project planning, which is where we are right now. Phase 1, which is our current state assessment. And then Phase 2, which is where we get to recommendations and roadmap. In our Phase 0, what we've tried to do
and typically what we have done, and we've actually done this already, is have some landscape meetings with some key stakeholders. And so we've done that with a few of the highway commissioners and also with the co-chairs. Again, just to understand the landscape in which the department operates we have kickoff meetings this is one of those kickoff meetings and we would like to have one with the Department of Transportation as well with a similar focus and and content so that the department understands how this project is gonna play out and so we're transparent there we also want to develop a project schedule and that'll
be part of that project work plan that we will present in a month and then we want to standardize our status reporting process and template we've already started that process with the folks at BLR and actually had our first status update meeting and we'll present that on a weekly update so that the folks at BLR and you all understand what our progress is towards execution. And those weekly status updates are also noted by the triangles on the high level timeline at the very bottom. The key deliverable from here is our project work plan.
In phase one, that's when we're really going to dive into our current state assessment. Our timeline says that doesn't start until, you know, about that first week of October, but truth be told, we've already started that process already. So what we want to do pretty close to the outset is really define the key functional areas for the department itself and understand its strategic positioning. We'll also want to review existing documentation. again, emphasizing the key focus areas, that portfolio planning, procurement, capital
expenditures, operations, maintenance, as well as taking a look at that operating platform, so organizational structure, personnel, IT, rules, and regulations. We're going to interview key stakeholders at the department and potentially a limited set of external stakeholders as well, and to the extent it makes sense, we want to administer a survey to the department, and also have some key interviews at district offices with a subset of those district offices. And then at the end of that process,
we're going to identify our findings, some pain points, and generate that supporting documentation at the end is that current state report that captures all of that. And then finally at phase two, that's where we get into recommendations. We're going to review those pain points, identify recommendations that we think best address those pain points and yield a number of efficiencies. We're going to identify some functional best practices from similar state highway departments and departments of transportation. We're going to help prioritize and sequence those recommendations,
develop a roadmap, and then, again, to the extent that those recommendations impact legislation, we want to address that. And then we'll provide some ongoing support with drafting some of that legislation, working with the folks at BLR to do that and this subcommittee and provide testimony where that makes sense. Now, that ongoing support is not depicted on this timeline. That ongoing support goes through December of 2020, and we don't want to include it here, otherwise it would really skew our timeline, but I wanted to make sure to emphasize that
as we're having our presentation today, that we are prepared to provide that ongoing support through December of 2020. At the end of the day, you all receive a future state recommendation report with roadmap and then the associated ongoing support. In our high-level timeline, we've called out a couple of things. Ideally, the kickoff meeting with the Department of Transportation would happen the very last week of September, if possible, depending on scheduling and authorization. We want to have that project work plan by the next subcommittee meeting.
Current state report we're anticipating towards the end of January, and our final future state report and roadmap, middle of March. that's a high level timeline once we've developed our project work plan we'll confirm those those dates the dots on the schedule for september october november december represent the subcommittee meetings where we'll be here to prevent present and provide updates but we will provide updates to the folks at blr on a weekly basis which brings us to next steps so we have some immediate next
steps the first one is requesting documentation and data from the department of transportation So we are actually working on this currently to finalize our formal data request list, and that might occur in a couple phases, but the initial one we are targeting for middle of next week. We've already been working with the department to establish and identify a point of contact at the department, and so we'll be working with Deputy Director Lori Tudor there in the execution of this project. After we request a documentation, we'll be working with the Deputy Director
to schedule interviews with key members at the Department of Transportation. We're targeting October 11th for us to have at least an initial schedule. Again, that might occur in phases, but our first phase, we want to have that schedule targeted by October 11th. And then by the next subcommittee meeting, we want to make sure we have that comprehensive work plan in front of you all to have that
presentation and discussion. And with that, Aaron, you want to add something? Okay, I think we have a few questions.
Speaker 1
27:13
First one, Representative Eves. Thank you, Mr.
Speaker 58
27:18
Chairman. Just real quick, at the beginning of your talk, you kind of briefly talked about P3
Speaker 60
27:24
usage. At the end of your report, when that comes out, are you going to have really analyzed areas that we might be able to utilize the P3 process in the highway department specifically?
Speaker 32
27:36
Certainly, that's our intention. I would expect that to be part of the recommendations that are coming out of best practices.
Our team has team members that are from other Department of Transportation and other places, and so they've studied some of those P3s. So we're definitely going to be looking for opportunities to include that in our recommendations here.
Speaker 64
27:58
Thank you. Sure. Representative Murdoch, do you have a question? Yes, thank you. So as we get to the phase of interviewing and talking to stakeholders, external stakeholders, and so I want to make sure that obviously from the part of the state that I am, We have lots of conditions that we need attention to.
So I want to make sure we're at the table because many times when you're not at the table, you become a part of the menu, and we want to make sure that we are properly considered in the formulation of priorities and in the formulation of your report as you're reporting and doing need assessments specifically that you pay attention. because we've got some farm situations that are very unique in the Delta that we need some attention paid to. And I've had great response from the department, let me say that. They've
been very, very cordial and responsive to me when I've asked for help. So I just want to make sure as we do this report that we remember those groups of people, those populations that need that attention. Thank
Speaker 32
29:08
you. Sure. So we actually, as we were working through some of our work planning this week, we collaborated together as a team, and part of the work plan will address lots of, well, all of the districts to some extent. So we'll definitely be paying attention
to the diversity of the Arkansas landscape. And don't be afraid to ask, because
Speaker 64
29:27
the people that are from these areas probably know these areas better than people that are central. So don't be afraid to ask those of us that are from those areas. We can help you.
Senator Linda Chesterfield
Unverified
29:44
Understood. Thank you. Thank you. Senator Chesterfield. I'm not going to echo, but I could. It gave me great hope when I saw the DBE in here, simply because there is a dearth of women
and minorities that make up the Highway Commission itself, and that is always of great concern to me because I don't see anybody in my shade of green on there. So I think that's important. I also think it's important as we look at, even though we feel that only individuals in the central area are being heard, that's not quite true as well. So as you look at stakeholders, I would ask that you think of us, too, as legislators and our concerns about it.
And I know that we are able to give those concerns to, is it Jillian who will be taking it? We'll be able to give those concerns. But I would like for us to look very closely at the hierarchy. Is that to be a part of it? The hierarchy at the Highway Department, I chair transportation once, and that was a concern of mine, as well as those individuals who are working in the field to find out what their concerns are. So we welcome you to the state again.
I met this gentleman, I think, at the policy committee. I did not have a chance to meet you. But it is important, and also I would just add that if the Department of Transportation is doing something well, I would like for that to be noted because we often find all the nitpicking stuff, but we never say they're doing an exceptional job in this arena, and I would like for that to be a part of the report as well. Thank you very much.
Speaker 1
31:26
Thank you. Any other questions from the committee?
Speaker 43
31:31
Do you all have anything before you close? Just a clarifying
Sagar Gokhale
Unverified
31:36
question. We should work with Jill in terms of securing legislator concerns. Yes. Okay.
Speaker 3
31:41
Yeah, I was going to read it. Everyone's concerns are important.
Speaker 1
31:45
just be sure that you direct them through Jill, and then she will pass them on. If there's nothing else, our next meeting will be October the 16th. Thank you all for coming. Thank you. Meeting's adjourned.
Unknown speaker
32:08
Well done. Will you be here Friday? You
Agenda
A. Call to Order and Comments by Committee Chairs
B. Report from the Arkansas Highway Commission on the progress of each public road construction project of ten million dollars ($10,000,000) or more, as required by ACA § 27-65-107(a)(19)
C. Update from Guidehouse LLP on study of the Arkansas Department of Transportation
D. Other Business
E. Adjournment
Documents
| Title | Type | Pages | Source |
|---|---|---|---|
| Agenda — ALC-HIGHWAY COMMISSION REVIEW AND ADVISORY SUBCOMMITTEE, Sep 18, 2019 | Agenda | 1 | Official source ↗ |
| Ex. B - HCRAS document 2019 Quarter 4 | Exhibit | 92 | Official source ↗ |
| Ex. C ARDOT Highway Commission Review Subcomittee ArDOT Review Kickoff Presentation vF PDF | Exhibit | 7 | Official source ↗ |
| HCRAS RO 20190918 | Exhibit | 5 needs OCR | Official source ↗ |
Speakers
Speaker 1
Speaker 3
Speaker 4
Senator Jonathan Dismang
Unverified
Speaker 13
Speaker 12
Speaker 19
Sagar Gokhale
Unverified
Speaker 25
Speaker 27
Speaker 32
Speaker 43
Senator Linda Chesterfield
Unverified
Speaker 52
Speaker 54
Speaker 55
Speaker 58
Speaker 60
Speaker 64