Notice Number: NOT-CA-08-026
Release Date: August 15, 2008
National Cancer Institute (NCI) (http://www.cancer.gov/)
Since Fiscal Year 2001, the NCI has had a policy that limits (to 20%) the increase in first-year direct costs that may be requested in any Type 2 R01, U01, or P01 renewal application (formerly called “competing continuation” application) over the award amount in the last year of the prior project period (i.e., over the last Type 5 award). In order to more closely align budgets proposed in renewal applications with actual funding levels, the NCI is revising this direct cost “cap” policy as outlined below.
The change affects all Type 2 R01, U01, and P01 renewal applications regardless of the amount of budget request or budget format (i.e., modular or non-modular). This change is effective for renewal applications that have receipt/submission dates on and after October 1, 2008. This Notice supersedes the previous Notice on the direct cost “cap” policy (https://grants.nih.gov/grants/guide/notice-files/NOT-CA-01-016.html ).
For all such renewal applications, the direct cost budget request for the first year cannot generally exceed an increase of 10% over the direct cost budget awarded for the last year of the prior project period (i.e., the last Type 5 award). This dollar cap for the direct cost increase is exclusive of any consortium/sub-contractual component of Facilities and Administrative (F&A) costs that may appear as direct cost in the budget of the applicant organization. Determination of the allowable costs for typical situations is discussed below. Additional details and calculation examples are provided on a Frequently Asked Questions web page (http://deainfo.nci.nih.gov/grantspolicies/newbudgetcap-faq.htm).
Case 1: Non-modular Budgets. All U01 and P01 renewal applications (regardless of requested budgets) and any R01 application that involves a request for direct cost budget in excess of $250,000 in at least one year of the project period must use a non-modular (detailed or itemized) budget (https://grants.nih.gov/grants/funding/modular/modular.htm). This rule applies regardless of whether the prior award has been based on modular or non-modular budget. In addition, the NIH policy (https://grants.nih.gov/grants/guide/notice-files/NOT-OD-06-096.html) requires that non-modular budget format is used by all foreign applicants regardless of the dollar amount requested
For the renewal applications that use non-modular budget format, the requested direct costs in the first year budget must not exceed 110% of the award amount for the last year of the prior project period (i.e., an allowable increase is up to a maximum of 10% over the direct costs of the last Type 5 award). The permissible direct costs that can be requested for the subsequent years of the proposed project may be increased only by the allowable cost-of-living factor.
Case 2: Modular Budgets. Any R01 renewal application that involves a request for direct cost budget not exceeding $250,000 in any year must use a modular budget (with the exception for foreign applicants noted above).
For renewal applications involving use of the modular budget format, the applicants may determine allowable direct costs by first calculating 110% of the last Type 5 award level and then rounding up the resulting dollar amount to the nearest “modular” amount.
A typical modular application will request the same number of modules for each year; however, well-justified modular increments (up to the specified modular ceiling) or decrements in the total direct costs for any year of the project that reflect substantial changes in expected future activities may be requested at the outset. For example, a major equipment purchase in the first year may justify a higher overall budget in that year, but not necessarily in succeeding years. There is no provision for escalation in future years. NIH requires additional narrative budget justification if there is a variation in the number of modules requested from year to year. An increase in modular levels in subsequent years may be possible in certain situation but will require prior approval by the NCI (see details under Case 3).
Note: If in any year, the budget exceeds $250,000, a non-modular (itemized) budget format must be used for the entire application (which then falls under Case 1). Even if the budget does not exceed $250,000, but an uneven annual budget allocation is sought, an application may fall under Case 3.
Case 3: Alternative Calculations of Allowable Direct Costs (NCI Approval Required). In certain situations (e.g., the examples given in the next paragraph), calculations for the 10% “cap” rule may be modified by:
These provisions may apply to the renewal of projects in which the last Type 5 award may be substantially lower than awards made in preceding years. In addition, the nature of some projects proposed for renewal may require variable budget allocations for one or more years. For example, such situations may be characteristic of some epidemiological and clinical research projects. In justifiable situations (assessed on a case by case basis, see below), the NCI may allow applicants to use this alternative way to calculate permissible direct costs.
If this alternative is used, the maximal permissible direct costs for the entire proposed project period should be determined as follows. First, the average direct costs per year awarded during the entire prior project period are calculated. Next, 110% of this average value is calculated to provide the nominal base for permissible costs in the first year on the renewal project. For applications involving non-modular budgets, this nominal base amount is escalated by the allowable cost-of-living factor for the remaining years of the proposed renewal project (but no such escalation is allowed when a modular budget is involved). The sum of these nominal values represents the maximal permissible direct costs for the entire proposed project period. This “total cap” amount may then be allocated for individual years at the applicant’s discretion as needed and appropriate for the nature of the project.
Applicants who are interested in this option MUST contact the NCI Program Director (Program Official) and Grants Management Specialist named on their current awards prior to submission of renewal applications. Prior approval of the NCI is required before any application with a budget using these alternative schemes can be accepted for review . The prior approval should be referenced in the application in the budget justification and the cover letter.
Case 4: Supplements in Prior Project Period. If the original award that is subject to renewal is associated with currently active supplemental award, the supplemental direct cost and the direct cost of the original award for the last year of the prior project period may be combined to form a base for the renewal budget request. However, this provision applies only if the work funded by the supplement will continue in the new project period.
Potential Future Supplements. This policy limits only the direct costs of the renewal requests and does not prevent potential competing and/or administrative supplements in the future, after a competing award has been issued. However, if the cumulative direct costs (main renewal award plus any supplemental request) exceed the original cap value, awardees will be required to obtain NCI permission prior to applying for such competing and administrative supplements..
Applicants submitting renewal applications are also cautioned that:
In addition to this new cap policy, the NCI may still mandate further reductions of awards to fit within the likely constraints of the budget. All awards, therefore, continue to be subject to future overall NIH and NCI cost-containment principles in effect at the time of award issuance.
Any grant application requesting a budget of $500,000 direct costs or more in any year requires approval prior to submission (see https://grants.nih.gov/grants/guide/notice-files/NOT-OD-05-004.html).
For unsolicited U01 cooperative agreements at any budget level, prior written approval of the NCI is required for permission to submit a renewal application as a U01. No prior approval is needed for renewal U01 applications submitted in response to a specific funding opportunity announcement (and their subsequent renewals) as well as those U01 awards that were originally funded as R01 awards and later converted to the U01 mechanism.
To assure careful consideration, all requests for prior approvals should be received by the NCI at least six weeks prior to the actual application receipt date.
Applicants who fail to adhere to the above-stated policy and associated requirements will likely face delays in the acceptance of application submission, assignment, peer review, and/or award issuance. Moreover, non-complying applicants will not be considered for any interim administrative supplements that might otherwise be available to bridge gaps in funding.
Exemptions from this policy may be granted in unusual situations. Requests for exemptions should be made in writing and sent to the appropriate NCI Program Director (Program Official). Every effort will be made to advise applicants on the options available to sustain their ongoing research.
All Investigators planning submission of renewal applications that may be affected by this policy are urged to consult with their current NCI Program Directors (Program Officials) and Grants Management Specialists listed on the current Notices of Award. These individuals should be contacted as early as possible (at least 30 days prior the intended application submission is recommended) to discuss the available options and maximum budgets that would be permissible for the renewal of specific current awards.
For general inquiries regarding this policy, applicants may also contact:
David Maslow, Ph.D.
Associate Director for Referral, Review, and Program Coordination
Division of Extramural Activities
National Cancer Institute
6116 Executive Boulevard, Room 8049, MSC 8326
Bethesda, MD 20892-8328 (For U.S. Postal Service Express or regular mail)
Rockville, MD 20852 (for non-USPS delivery)
Office of Grants Administration
National Cancer Institute
6120 Executive Boulevard, Room 2433, MSC 7150
Bethesda, MD 20892-7150 (For U.S. Postal Service Express or regular mail)
Rockville, MD 20852 (for non-USPS delivery)
Weekly TOC for this Announcement
NIH Funding Opportunities and Notices
Office of Extramural
National Institutes of Health (NIH)
9000 Rockville Pike
Bethesda, Maryland 20892
Department of Health
and Human Services (HHS)
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