American Society of Hematology

NIH Releases Additional Information on FY 2013 Funding Policies Under Sequester

Published on: June 10, 2013

Updated May 22, 2013  

Because the Congress was unable to reach an agreement on how to reduce the deficit, President Obama issued an order implementing the automatic, across-the-board spending cuts known as "sequestration" on March 1, 2013. Under sequestration, the National Institutes of Health (NIH) budget is cut by $1.6 billion over the next seven months.

On May 8, the NIH released its fiscal operation policy for the remainder of the fiscal year 2013 (FY 2013), which implements the continuing resolution signed by the President on March 26 as well as the sequester. The FY 2013 NIH budget is $29.5 billion, which is a decrease of approximately five percent from appropriations in FY 2012. The main points from the fiscal operation policy notice are:

  • NIH will continue many of the same policies established in FY 2012, including National Research Service Awards (NRSA) stipend levels, salary limits, and other legislative mandates in effect for FY 2012.
  • Non-competing research grant awards will continue to be made at up to 90 percent of the previous committed level indicated on the most recent Notice of Award.
  • NIH will make fewer competing awards (each Institute and Center will determine the specifics).
  • The policy set forth in FY 2012, which discontinued inflationary increases for future year commitments, remains in place, but adjustments for special needs will be considered.
  • NIH will continue the targeted support of new investigators, aiming for a success rate on new (type 1) R01 equivalent grants comparable to that of established investigators.
  • Institute and Center Directors will determine the approach to meet the new budget level at their individual Institute/Center; additional details from the individual Institutes on cuts to specific programs will be made available on the NIH extramural financial operations page as they are posted.

According to the mechanism table accompanying FY 2013 operating plan, the NIH expects to fund 703 fewer new competing research grants this year.  Including non-competing ongoing (already awarded) grants that are ending, the total number of research grants will drop by 1,357. Individual Institutes and Centers have some flexibility in implementing these cuts and some Institutes have already released their funding plans for the remainder of the fiscal year, summarized below. For questions on specific grants, Grants Management Specialist identified in the Notice of Award should be contacted.


In a May 7 letter to the NCI-supported scientific community NCI Director Dr. Harold Varmus states that the NCI’s budget for the current year will be approximately $4.78 billion, $293 million less than in FY2012, a reduction of 5.8 percent (5.1 percent due to sequestration). Over 20 percent of the NCI budget is comprised of fixed costs (salaries for NCI personnel, rents, utilities, Clinical Center expenses, etc.) and cannot be reduced. The NCI has also decided not to reduce salaries for NIH trainees. Thus, other components of the NCI budget will absorb the entire reduction, lowering their allocations by an average of over 7 percent. Appreciable reductions will be made in ongoing (non-competing) grants (about 6 percent), centers and other research programs (6.5 percent), and research and development contracts (8.5 percent). Similar or even larger reductions were applied to the discretionary parts of other budgets, such as research management and support and the intramural program, in both of which salaries constitute most of the expense.

As a result of these decisions, the NCI expects to fund slightly more than 1000 new and competing grants; “less, but only a bit fewer, than the nearly 1100 funded in each of the past couple of years” said Dr. Varmus. “The already low success rates for grant applicants (recently in the range of 13 to 14 percent) may decline a small degree, but we believe that we have achieved a fair compromise, given the size of the budget reduction overall, our commitments to current grantees, and our several fixed costs.”

The NCI FY 2013 Funding Policy is summarized below:

Competing Awards  

Although there will be no guaranteed paylines, Traditional (R01) and Exploratory Development (R21) applications up to the 9th percentile will be funded this fiscal year with only rare exceptions. Individual applications beyond the 9th percentile will be considered for funding by the NCI Scientific Program Leaders (SPL) following discussions with Program Staff. The SPL will give special consideration to applications that fill a significant gap in the cancer research portfolio or propose an especially novel or promising scientific approach.  

Competing Policy Reductions (all mechanisms)  

FY 2013 competing renewals (type-2s) will be funded on average at the current level and the new grants (type-1s) will be funded on average at a 17% reduction from the Initial Review Group (IRG) recommended level. Any competing grants that were awarded at more reduced levels while the Institute was operating under the initial Continuing Resolution will be restored to the full year policy level.

Non-competing (Continuation) Awards  

Both Categorical and Modular non-competing grants will be awarded with a 6% reduction from the committed level. No cost of living (COLA) adjustment will be awarded to any FY 2013 non-competing grants; however, adjustments for special needs (such as equipment and added personnel) will continue to be accommodated. This policy applies to all grants, except NRSA, Careers, Cancer Education, Conference and STTR awards which will be awarded at committed levels, and non-competing SBIRs which will be awarded at a 3.9% reduction from the committed level.  FY 2013 awards that were issued prior to the implementation of this policy will be revised to adjust the award level accordingly.

New Investigators   

NCI has a strong commitment to new investigators. As with the experienced investigators, R01 applications that receive scores up to the 9th percentile will be funded this year with only rare exceptions. For Traditional R01 selections beyond the 9th percentile, the SPL will give special consideration for new investigators, particularly those who are in an early stage of their careers.


NHLBI’s FY2013 Funding Policy and funding guidelines were released on May 16.  In his letter to the NHLBI-supported scientific community, NHLBI Director Dr. Gary H. Gibbons stated that the NHLBI's budget for FY 2013 will be approximately $2.9 billion, which is nearly $175 million (about 5.7 percent) less than the FY 2012 funding level.  He said that "the magnitude of the budget reductions mandated by the sequester necessitated a broad-based approach that affected all NHLBI budget lines. The implementation of the budget cuts was guided by our enduring principles to prioritize investments in investigator-initiated R01 awards, new/early stage investigators, and trainees. The fiscal austerity reflected in our appropriation necessitated a difficult choice between two options: 1) fully-funded awards with a consequential decrease in the number of awards and single-digit payline versus 2) a double-digit payline with an approximate 5-7 percent total cost reduction in all awards. In accordance with our stated principles and the guidance of the NHLBI Advisory Council, we elected to pursue the latter allocation approach. As a result, the NHLBI will increase the FY 2013 payline for R01 awards to the 11th percentile from the current 6th percentile. Similarly, despite the overall cut in the budget, our prioritization strategy will strive to restore paylines to other mechanisms related to trainees and new/early-stage investigators toward those of FY 2012."  The summary of the NHLBI FY2013 policy is below:

Competing Awards
The NHLBI will award competing applications at 95.2 percent of the NHLBAC recommended level including any other specific programmatic and administrative adjustments. Applications that do not exceed $250,000 direct costs in any given year of support in the recommended competitive segment are generally awarded under the modular concept. Applications requesting direct costs that exceed $250,000 in any year of support in the recommended competitive segment will be awarded with categorical budgets. If a proposed award would result in a reduction greater than 25 percent from the requested amount in the application, NHLBI program staff will contact the PI and the applicant institution before an award is issued to obtain either a statement that the approved aims and objectives can be accomplished within the proposed level of support, or a revised statement of aims and revised budget for the proposed level of support.

Competing Award Payline Table  

Grant Program  


Priority Score  





Research Project Grant




Early Stage Investigators




Investigator-Initiated Innovative Research Grants




Academic Research Enhancement Awards (AREA)

R41, R42



Small Business Technology Transfer (STTR) Grants

R43, R44



Small Business Innovation Research (SBIR) Grants




Program Project Grant

P01 Subproject



Program Project: Subproject




AIDS Grants

K awards



Career Development Awards




Institutional NRSA Training




Pre-doctoral NRSA

F31, F32, F33



Pre and Post-doctoral NRSA

*Summary Statement issues must be satisfactorily resolved on applications >16 percentile.

Non-competing (Continuation) Awards
Non-competing (Type 5) grants will awarded at 95.2% and will not include cost of living/inflationary adjustments; however adjustments for special needs (such as equipment and added personnel) will continue to be accommodated whenever possible. This policy applies to all grants (research and non-research) when applicable.

Early Stage Investigators (ESIs)
Fostering the success of Early Stage Investigators (ESIs) who are establishing careers in biomedical research is a high priority of the NHLBI and NIH. The NHLBI emphasis on ESIs is reflected in the special consideration given in determining both funding priority and period of support. The NHLBI routinely considers funding ESI applications that score outside of the normal funding range.

The NHLBI will continue a commitment to help ESIs in accordance with NIH guidelines articulated in the NIH Guide Notice Revised New and Early Stage Investigator Policies. All awards to ESI applicants that are included under that policy will be funded for all years recommended by the NHLBAC.

The NHLBI considers ESI eligibility for special funding consideration of a resubmission application to have been determined at the time of the initial unamended (A0) submission. If an applicant would have qualified for ESI special funding consideration at the time of the A0 application submission, that eligibility would be maintained through the A1 revision.

For 2013, the first competing renewal (Type 2) application from PIs who were initially funded as ESIs will also receive special funding consideration. Additional information on ESIs can be found in the NHLBI document Commitment to Early Stage Investigators.

As of FY 2010, new (Type 1) applications from New Investigators (NIs) who do not qualify as ESIs will no longer be considered for special funding. However, the first renewal (Type 2) application from PIs who were initially funded as NIs before FY 2010 is eligible for special funding consideration under the NI funding policy that was in place.

Duration of Grant Support
Competing awards are adjusted to achieve a four-year average duration for research project grants and to meet cost management goals. Applications from ESIs, program project grants, and clinical trial grants are generally awarded for the full length of their Council-recommended project period. Competing applications with a Council-recommended duration of four years will not be reduced further to three years. Amended applications (A1s) will be reduced by one year, regardless of the priority score or percentile accorded the application.

Beginning in FY 2014, it is anticipated that NHLBI policy will be to fund investigator-initiated R01 competing applications, regardless of percentile or priority score, for a period of four years. The only exceptions to this policy are:

  • awards made to Early Stage Investigators
  • awards for studies with a patient accrual and follow-up timeline that cannot be accomplished within four years;
  • awards for AIDS-related research


NIDDK FY 2013 Funding Policy released on May 8 states that NIDDK’s appropriation for FY 2013 is $1.693 billion, a decrease of about 5.68 percent from appropriation in FY 2012. To comply with the NIH operating budget, NIDDK released the following funding guidelines:

Competing Awards  

For FY 2013 NIDDK is establishing a nominal “payline” for new (Type 1) and renewal or competing continuation (Type 2) R01 applications of 11th percentile. Most R01 applications which have a primary assignment to NIDDK and which request less than $500,000 direct cost per year and score at or better than the 11th percentile will receive an award (applications which have NIDDK as a secondary assignment do not benefit from this payline). R01 applications requesting $500,000 or more in direct costs for any year will be held to a more stringent pay line – the 7th percentile for both Type 1 and 2 applications.

Non-competing (Continuation) Awards  

Non-competing (Type 5) awards will be likely be made at levels below those indicated on the notice of grant award; however adjustments for special needs (such as equipment and added personnel) may be accommodated on a case by case basis. This policy applies to all grants (research and non-research) when applicable.

Update: The NIDDK Council’s discussion at the May 15 meeting suggested that the dollar amount of ongoing R01 awards will be reduced by 3.5 percent in FY 2013.  

Early Stage Investigators (ESIs)  

Fostering the success of investigators establishing careers in biomedical research is a high priority of the NIDDK and NIH. In FY 2013 NIDDK will place special emphasis on supporting ESIs (investigators within 10-years of their terminal research degree or medical residency who have not yet been awarded a substantial, competing NIH research grant) by establishing a nominal payline for R01 applications submitted by ESIs at the 16th percentile. In addition, when possible and appropriate the full period of support recommended will be awarded.

Bridge Support   

In cases where a competing renewal application falls near but beyond the nominal payline, NIDDK will continue to consider interim support on a case-by-case basis and provide limited, support in selected cases. The goal is to preserve essential research resources pending the re-review of a revised application. NIDDK can choose to award a one- or two-year R56 grant to an R01 application scored outside the payline. These awards provide support for investigators to collect preliminary data and use these data to revise and improve their R01 applications.

Duration of Grant Support  

Competing awards are adjusted to achieve a 4-year average duration for research project grants. Nevertheless, applications from ESIs, MERIT extensions, program project grants, and clinical trial grants are generally awarded for the full length of their recommended project period.

ASH Call to Action

While the impact of these cuts may not be felt all at once or immediately, they will adversely impact biomedical research. It is critical that all Members of Congress hear from their constituents about how the NIH budget cuts threaten biomedical research. Please visit the ASH Advocacy Center to take action now. In addition, NIH Director, Dr. Francis Collins, is asking for feedback on Twitter about how the sequester is affecting individual NIH grantees’ biomedical research right now using #NIHSequesterImpact.


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