Arkansas "Pre-DOGE" Project

Governor says her plan targets "waste, fraud, and abuse"

Would you be surprised to learn that Arkansas has a project to identify the "waste, fraud, and abuse" in our state budget?  We sure were when we heard Governor Sarah Sanders brag about the state's "pre-DOGE" project to organizer Mercedes Schlapp at the 2025 Conservative Political Action Conference back in February:

Just within the first six months we've already identified at least $300 million in savings, which is big for Arkansas -- our budget is $6 billion...

The Governor was talking about her Arkansas Forward project (not to be confused with the nonprofit Forward Arkansas) that has itemized about $300 million" in costs savings and avoidance" over six years, according to a 965-page report from Washington, D.C.-based McKinsey & Co., the (familiar?) consultants the State hired to "closely examine state real estate, information technology, and personnel."

When the Governor released the report (mostly dated October 9) back in December 2024, McKinsey & Co. had completed a majority of its work under the 3-year, $5.5 million contract that the Legislature approved in February, 2024. By that time, Arkansas had paid $4.037 million to the company, which was selected for the job with a high score and the least expensive price from a group of eight proposals.

"We are committed to delivering a tailored ‘Arkansas Answer’ to realize Governor Sanders’ vision for this project,” McKinsey’s proposal states. "... We will help move the state toward a renewed culture of performance, accountability, and continuous improvement. Throughout, Governor Sanders’ clear compass will steer the project: better state government services at less cost for all the citizens and communities of Arkansas.”

Former Republican Governor Asa Hutchinson was the last Governor to reorganize state government when he cut 42 state agencies back to only 15.  That was six years ago in 2019 when he also tasked executive branch leaders with finding efficiencies within procurement, office space, fleet management, and personnel -- the same areas where the December 2024 McKinsey/Arkansas Forward report recommends that Arkansas's existing 15 state agencies should

– Integrate information technology systems;
– Centralize state procurement processes and renegotiate statewide contracts for better pricing;
– Sell the state’s older vehicles to lower maintenance costs and reduce fleet size and centralize vehicles to create efficiency;
– Reduce state government’s physical footprint and create a database of existing real estate; and
– Implement the governor’s pay plan proposal and centralize training and professional development

State Senate says NO

Meanwhile, HB1934 by Republican state Representative Mindy McAlindon that would have set up a dedicated DOGE effort failed after a parliamentary procedure in the Republican-majority state Senate blocked it during the 95th General Assembly.

The House had very easily passed her bill (80-10, with 8 non-voting) that would have tasked a group of agency secretaries plus House and Senate-appointed members to form a DOGE-specific working group that would also "accept public submissions," and work to "identify inefficiencies, opportunities for resource optimization, and unnecessary or burdensome regulations," with a final report due July 1, 2026.

What's Been Recommended?

Per MSN the plan has five components (details below):
Procurement
Information technology
State vehicles
State employees
Government buildings

Procurement process

The plan calls for a "redesign" of the state government's procurement process and an "imperative for systematic change." Arkansas could save upwards of $230 million by making changes to this process by what officials say is getting the "'right stuff', at the 'right (total) price', through the 'right processes.'" ... suggestions to improve the procurement process include:

- Making product categories consistent across departments
- Consolidating contracts for "commodities and services"
- Enhancing the negotiation process for "major solicitations" for better rates and terms
- An e-procurement system and training for procurement staff

Forty initiatives have been proposed to manage "demand for vendors and support" as well as using analytics to refine pricing and optimizing any processes for "speed and value." The report focuses on PO and P-card spending from Arkansas's executive department which accounts for $1.7 billion in expenses. Those purchases account for around 7% of the $22.3B in expenses.... The report also notes that Generative AI (GenAI) could "capture value" in the state's procurement processes. GenAI could be used to increase speed and efficiency among multiple systems and tools. One solution to use GenAI includes analyzing large volumes of contracts to compare terms to benchmarks and provide recommendations on renegotiations.

Information technology

In the report, officials say that improving IT could save around $65 to $130 million annually that could help modernize state systems as well as help Arkansans with "customer experience" and reduce any cybersecurity risks. Arkansas spends anywhere between $680 to $700 million annually for IT services with around $6 million on cybersecurity. The report notes that similar states to Arkansas spend around $60 million cybersecurity and nearly $170 million more on applications than other states. Suggestions to save money include:

- Consolidating or retiring apps and making less critical or duplicate projects low priority
- App modernization to "reduce legacy tech risks"
- Improving IT program governance and management
- Negotiating better prices from vendors through a new consolidated procurement process
- Enhancing cybersecurity and analytics capabilities

State vehicles

The state currently owns and operates 3,980 vehicles across all departments, which costs around $21 million per year. Leaders within the fleet department noted that some issues are that over 600 vehicles were rarely used in 2023, maintenance and refueling is done "as-needed" without comparing costs, and the data "ecosystem is fractured." The report suggests reducing the fleet size to under 900 vehicles and reducing the age from nine to four years for vehicles owned by the state. To reduce the amount of vehicles, it is suggested the state sell off assets, implement vehicle sharing, and "realigning trips to the lowest-cost transportation option." ... Changes to the fleet system could reducing spending by $3 to $5 million annually, according to the report.

State employees **

The report notes that state is beginning to see a "retirement wave" which could lead to knowledge and experience loss. The state is also seeing challenges when it comes to recruiting and retaining talent within the state government. Also highlighted was that the state's performance evaluation process is seen as "unfair" and the feeling is that it "favors higher graded leaders over frontline staff ... State government’s current approach to performance and pay does not deliver its intended results," the report noted. "A systematic change is needed." A new system suggested by the report should include the following:

- Compensation linked to market dynamics and reinforced by bonuses as well as performance driven
- Streamlining positions, skill development, and the career path
- A simplified semi-annual performance evaluation

Changes to the bonus structure would include one-time and "spot" bonuses. One-time bonuses would typically go to a department's top performers or could be capped at a certain price "to favor more frontline and mid-level staff versus senior executives." A spot bonus would be to reward someone for exceptional work for specific projects.

Government buildings

When it comes to buildings owned by the state, the report highlighted that "many buildings" are "suboptimal" when it comes to employee experience and could hinder retention of current and future employees. An analysis showed that the state could save around $15 to $25 million by doing the following:

- Increasing occupancy in Little Rock offices, selling owned properties, or exiting leases
- Consolidating offices not in Little Rock
- Selling or repurposing "underutilized" land
- Centralizing certain facilities and operations

By consolidating offices in Little Rock, the state could save $10 to $20 million annually and $3 to $6 million annually by consolidating offices not in the capital city.

The report also proposes centralizing how Freedom of Information Act requests are processed, consolidating boards and commissions, restructuring Medicaid operations and streamlining eligibility and enrollment for maternity care.

** The December 2024 McKinsey/Arkansas Forward report specifically aimed at topics from Governor Sanders' plans, including her initiative to upgrade state employee pay, which (along with her education-related agenda) makes up a significant part of her state budget.

Would you be surprised at how Arkansas rides on the coat-tails of the very successful, popular DOGE efforts by President Trump and Elon Musk without actually committing to the very real fight to aggressively root out overspending and waste in our state government? If we cannot do it now, with our "all-Red" Republican trifecta state government, when will we?