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State Seal Commonwealth of Kentucky Governor Ernie Fletcher’s Communications Office
Governor Ernie Fletcher Announces Significant Efficiency Improvement in the Transportation Cabinet Saving Taxpayers More Than $70 Million
Press Release Date:  December 2, 2004
Contact:  Doug Hogan
Jeannie Lausche
Jason Keller

Governor Fletcher Continues to Fulfill Campaign Pledge to Operate Government More Efficiently and Effectively

Frankfort KY: Governor Ernie Fletcher announced today that changes made by the current administration have lead to cost savings of more than $74 million and greater efficiency within the cabinet.  Improvements have been made in overtime reduction, contract bidding, and increased scrutiny of contract change orders.

“I am committed to operating state government as efficiently and effectively as possible, and this announcement is a clear example of my administration’s pledge to save taxpayer’s dollars,” stated Governor Ernie Fletcher. “This reduction in the cost of doing business has not come at the expense of reduced services, but rather, our employees are working harder and smarter to better serve the great people of this Commonwealth.”

“Our administration has seen a decrease of 62 percent in the amount of change orders approved this fiscal year, the lowest that number has been in five years,” Transportation Secretary Maxwell Clay Bailey said.

In addition to savings through better efficiency on change orders, the Cabinet accomplished one-time savings of $23 million dollars through the Road Fund Lapse in Fiscal Year 2004.  Half of that amount was a result of savings on overtime, out of state travel, and one-time savings in delays on hiring, purchasing equipment, and leaving a number of job positions vacant.

 “That accomplishment, coupled with the cost reduction through our increased scrutiny of our change order process has led to a savings of millions of dollars in the Transportation Cabinet,” Governor Fletcher said.

Secretary Bailey added that changes were made in the change order approval process after he and his team discovered a lack of control and checks and balances of the approval of change orders on some projects by the past administration.  Those changes include:

  •          The Commissioner of Highways must approve any change work order requests on any projects.
  •         Sufficient documentation must be provided on change orders to show justification as to why the change order is needed.
  •          Change orders will only be considered if all our cabinet construction and design engineers agree that the change is needed.
  •          No work on any change work order requests will begin in the field until approval is given by the Commissioner of Highways.

Governor Fletcher also announced other efficiency changes to reduce costs within the Transportation Cabinet, including increased scrutiny of the contracting process and better prices on construction projects being done.  These changes have led to the Cabinet rejecting more than three times the dollar volume on contract bids in 2004 verses last year, and a five percent decrease in the price of asphalt despite the fact the price of petroleum has jumped 20 percent in the last year.

“While we are pleased with the efficiencies we’ve accomplished so far, but we still have much work to do,” Governor Fletcher said. “We will continue to work diligently to provide a safe and reliable transportation system that promotes economic development and tourism, and continues to safeguard the public trust placed in us.”

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Last updated: Thursday, June 02, 2005