Effect of Sequestration on UA Sponsored Awards

A March 1st, 2013 letter from to the Campus Research Community from Leslie Tolbert, Sr. Vice President for Research, on the Effect of Sequestration on UA Sponsored Awards:
Thanks to the efforts of our outstanding investigators, research expenditures at UA have continued to rise, reaching a record of $625M in FY2012.  Now, however, the threat of across-the-board automatic Federal funding cuts known as “sequestration” raises a serious threat to the research enterprise at UA, and indeed at universities across the country.  With sequestration set to begin on Friday, March 1, we anticipate that most Federal agencies will announce their approach to meeting their new budget levels soon. 
All Federal agencies have been operating under a Continuing Resolution (CR) since October 2012.  The impact of the CR has already been felt, with most agencies reducing the number of new awards and the amounts awarded, and reducing the budgets of non-competing continuation awards.  The University of Arizona, like most other universities, has already felt the effect of reduced awards.  Our awards through the second quarter of FY 2013 are at their lowest levels since FY 2009, having fallen by $38.4M compared to the same time point in FY 2012.
Federal awards account for 78% of total research awards to the UA, with about 73% of the total Federal awards made by just three agencies: National Institutes of Health (NIH), National Aeronautical & Space Administration (NASA), and National Science Foundation (NSF).  The UA receives more Federal funds from NIH than any other source.
It appears that the Federal agencies will have discretion in how they implement 5.1% reductions in their budgets.  NIH issued an announcement last week on its operation plan in the event of a sequestration (http://grants.nih.gov/grants/guide/notice-files/NOT-OD-13-043.html).  The plan calls for a reduction in the funding of current continuing awards to “up to 90%” of the previously committed levels, and the funding of fewer competing and new awards.  NSF has just today released the outline of its plan (http://www.nsf.gov/pubs/2013/in133/in133.pdf), which indicates that they, too, will try to maintain existing awards but reduce the number of new grants by about 1,000.
Because the different Federal agencies, and programs within agencies, may treat their cuts differently, it is difficult to predict the how individual grants and contracts will be affected.  We anticipate that most if not all agencies will announce their plans for implementing cuts by the end of March, when the current Continuing Resolution ends.  We will continue to monitor events as they unfold and share information with you as it becomes available.  We urge you to contact your program officers if you have questions about specific Federal grants and contracts.  My office and Graduate Dean Andrew Carnie’s office are available to provide advice on contingency planning related to grant support.