February 27, 2013

Federal Budget Sequestration: NIH, NSF Issue Notices

The federal budget sequestration process was included in the Budget Control Act of 2011, which increased the debt limit, cut $1 trillion in discretionary appropriations through lower annual spending caps over nine years, and directed a committee to identify an additional $1.2 trillion in cuts to federal programs over fiscal years 2013-2021. This committee failed to reach an agreement, triggering sequestration to carry out the additional $1.2 trillion in cuts. The budget sequestration, set to begin in January 2013, was delayed until March 1, 2013 by Congressional passage of the American Taxpayer Relief Act of 2012.

Federal agencies have begun to issue notices related to the potential impact of sequestration on grants and contracts.

Note: For updated information, see Impact of Federal Budget Sequestration on Sponsored Projects on the Sponsored Projects Office web site.

National Institutes of Health

The National Institutes of Health published NIH Operation Plan in the Event of a Sequestration (NOT-OD-13-043) on February 21, 2013. This notice states the following.
“The NIH continues to operate under a Continuing Resolution as described in NOT-OD-13-002, and therefore all non-competing continuation awards are currently being funded at a level below that indicated on the most recent Notice of Award (generally up to 90% of the previously committed level). Final levels of FY 2013 funding may be reduced by a sequestration. Despite the potential for reduced funding, the NIH remains committed to our mission to seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce the burdens of illness and disability.

Should a sequestration occur, NIH likely will reduce the final FY 2013 funding levels of non-competing continuation grants and expects to make fewer competing awards to allow the agency to meet the available budget allocation. Although each NIH Institute and Center (IC) will assess allocations within their portfolio to maximize the scientific impact, non-competing continuation awards that have already been made may be restored above the current level as described in NOT-OD-13-002 but likely will not reach the full FY 2013 commitment level described in the Notice of Award. Finally, in the event of a sequestration, NIH ICs will announce their respective approaches to meeting the new budget level.”

National Science Foundation

The National Science Foundation issued Important Notice No. 133: Impact of FY 2013 Sequestration Order on NSF Awards on February 27, 2013. This notice to presidents of universities and colleges and heads of other NSF awardee institutions includes the following statement.
“At NSF, the major impact of sequestration will be seen in reductions to the number of new research grants and cooperative agreements awarded in FY 2013. We anticipate that the total number of new research grants will be reduced by approximately 1,000.

In keeping with the first core principle listed above, and to assure continuity and minimize disruption of scientific research, all continuing grant increments in FY 2013 will be awarded, as scheduled, and there will be no impact on existing NSF standard grants. The same intent applies to annual increments for cooperative agreements, though overall funding constraints may require reductions to certain major investments. These will be handled on a case-by-case basis.

It is also important to advise you that the Foundation is currently operating under a Continuing Resolution (CR) that will expire on March 27, 2013. Once NSF has appropriations in place beyond March 27th, we will revise this notice as necessary.”