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Sequestration Guidance as of May 2013

On March 1, 2013, a memorandum (M-13-06) was sent to the heads of executive departments and agencies. President Obama has issued a sequestration order in accordance with section 251A of the Balanced Budget and Emergency Deficit Control Act, as amended (BBEDCA), 2 U.S.C. 901a. The sequestration requires a cancellation in the amount of $85 billion in budgetary resources across the Federal Government for the remainder of FY 2013. FY 2012 awards will unlikely be affected by the sequestration. Different federal agencies will be reviewing their options to re-scope, delay, or cancel awards in order to meet the sequestration requirements on FY 2013 awards. The decisions will all depend on the nature of the work and the availability of resources. We will add information to this document as we receive it. However, should you have any questions or receive communication from your sponsor in regards to your award, please contact your Grant Specialist or the Office of Grant and Contract Services to manage the award going forward. 


National Institutes of Health (NIH)                                        -5.5%


NIH received approximately $29.5 billion for FY 2013, which is a decrease of approximately 5.5% from last year.  As a result of this budget reduction of $1.71 billion, NIH expects to fund 8,283 new and competing research grants this year, a drop of 703 grants. Including ongoing (already awarded) grants that are ending, the total number of research grants will drop by 1,357 to 34,902 awards.  NIH will try to keep the size of the average award consistent with 2012 and will not award inflationary increases for future years.  The agency also expects to trim continuing grants.  Grants that were cut up to 10% earlier this year because of budget uncertainty may be partially restored, but probably not to the original commitment level.

NIH plans to implement sequestration can be found here:
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-064.html

More information:
http://www.nih.gov/news/health/jun2013/nih-03.htm

 


National Science Foundation (NSF)                                      -2.1%


NSF received $6.884 billion in FY 2013, which is a decrease of approximately 2.1% from last year.  In implementing the sequestration, the agency intends to maintain existing awards, protect NSF staff, and protect STEM human capital development programs.  The major impact of sequestration will be seen in reductions to the number of new research grants and cooperative agreements awarded in FY 2013.  The agency anticipates 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.

How NSF plans to implement sequestration can be found here:
http://www.appropriations.senate.gov/ht-full.cfm?method=hearings.download&id=b6f004dc-9f6c-4d7a-b5df-53afccc05664

 


Department of Defense (DOD)                                                -9%


DOD research and development (R&D) received a reduction of approximately $7 billion in FY 2013, which is a decrease of approximately 9% from last year.  DOD predicts that this will result in a reduction of approximately $200 million in research grants to universities.  The agency intends to protect RDT&E, investments funded in Overseas Contingency Operations if they are associated with urgent operational needs.  DOD will also protect RDT&E programs most closely associated with the new defense strategy.

DOD has instructed program managers to avoid cuts that are irreversible or produce significant disruptions or added costs.

DOD has not yet released funding cuts to individual S&T programs such as the 6.1, 6.2 and 6.3 accounts within each service.  That information is expected to be released to the public in the coming weeks.

DOD plans to implement sequestration can be found here: http://zyn.com/sbir/insider/DoD_handling_budgetary_uncertainty.pdf

http://www.appropriations.senate.gov/ht-full.cfm?method=hearings.download&id=ec40c05d-7207-4253-814b-4b0b2bd0e95b

http://www.aip.org/fyi/2013/091.html

DOD Defense Strategy:
http://www.defense.gov/news/defense_strategic_guidance.pdf
 

 


Department of Energy (DOE)                                                   -4.4%


DOE R&D programs received a reduction of approximately $479 million in FY 2013, which is a decrease of about 4.4% from last year.  As a result, the agency predicts that there will be significant cuts to the basic science mission, including curtailment of operations affecting 25,000 researchers and operational personnel.  Research grants will be reduced in number and size, and the pipeline of support for graduate and post-graduate research fellowships will be constricted.  ARPA-E expects to administer cuts to new awards.  Existing awards from ARPA-E would see no impact from sequestration.

DOE has not yet released funding cuts to individual R&D programs and activities.  That information is expected to be released to the public in the coming weeks.

More information on DOE plans to implement sequestration can be found here: http://www.appropriations.senate.gov/ht-full.cfm?method=hearings.download&id=2959bd54-8f74-4b9b-8cd9-2771f20c19b4

 

 


Department of Education (DoED)                                      -5.23%


DoED received a reduction of approximately $2.5 billion in FY 2013, which is a decrease of about 5.23% from last year.  Under current law, Pell Grants are exempt from across-the-board cuts in academic year 2013-2014. However, Pell Grants will be subject to cuts in future years.  Student loans will see small increases in origination fees for loans made after the sequester order.  Supplemental Educational Opportunity Grants (SEOG) will be cut by $37 million and Federal Work Study will be cut by $49 million.  Funding will continue to be awarded through existing SEOG and FWS formulas.  In addition, there will be cuts in mandatory funds for the administration of federal financial aid programs, which will affect the servicing of student loans by the servicers that contract with the federal government. Funding for other services, such as FAFSA processing, Pell Grant disbursements, loan originations, and other tasks, may also be reduced.  The agency also expects to scale back the number of new competitive grants rather than reduce existing grants and continuation grants (however, there will be some reductions to continuation grants). 

More information on DoED plans to implement sequestration can be found here: http://www.ed.gov/news/speeches/testimony-secretary-arne-duncan-senate-appropriations-committee-possible-impact-seques

More information on funding cuts to individual programs within the DoED can be found here:
http://www2.ed.gov/about/overview/budget/budget13/13action.pdf

More information on funding cuts to individual programs within the DoED by state can be found here:
http://www2.ed.gov/about/overview/budget/statetables/14stbyprogram.pdf