POLICY OF THE NATIONAL CANCER INSTITUTE FOR ALLOWABLE REQUESTED BUDGET LEVELS OF 
COMPETING CONTINUATION (TYPE 2) R01 and U01 APPLICATIONS

Release Date:  August 7, 2001

NOTICE:  NOT-CA-01-016 - (See Notice NOT-CA-08-026 Change in Allowable
Requested Budget Levels of Renewal (Type 2) R01, U01, and P01 
Applications for the National Cancer Institute)

National Cancer Institute

In recent years, the budgets of the NIH and NCI have experienced 
unprecedented growth. During the same period, however, increases in 
budget requests for both new and competing renewal grant applications 
have been even greater.  Although the NCI recognizes the need to permit 
inflationary and adjustments in a competitive renewal request, budget 
requests have far exceeded this level.  If this accelerated growth in 
budgets continues, it would mean that NCI would have to reduce 
substantially the total number of new and competing awards it could 
make annually.

To maintain a reasonable number awards, therefore, the NCI is 
implementing limits on the level of increases requested for competing 
continuation single project research grants (R01) and cooperative 
agreements (U01).  Beginning with the November 1, 2001, receipt date, 
budget requests for direct costs for NCI support competing continuation 
(type 2) R01 and U01 applications cannot exceed an increase of 20% over 
the direct cost award level in the last non-competing (type 5) year. 
Awardees in their last year of current support will be notified by NCI 
of the maximum permissible budget for a competing continuation. 

For all applications, the “direct cost” dollar cap total is exclusive 
of any sub-contractual Facilities and Administrative (F&A) costs that 
appear as direct cost in the budget of the applicant organization.  For 
direct cost awards in excess of $250,000, calculating the new maximum 
level should be straightforward.  Awardees seeking renewal of modular 
grants with such costs should explicitly show these “F and A” 
calculations if it affects the justification for an increase in number 
of modules being requested.   If for any year budget exceeds $250,000 
because of F&A calculations or a one time cost, such as equipment, a 
non-modular budget should be submitted.

Current modular awards whose new competing continuation budget request 
would place them over the current NIH module limit (and who must 
therefore submit an itemized budget) will be held to the 20% maximum 
increase in dollars requested over the last non-competing year.  Future 
year budget requests for such competing continuations cannot, over the 
life of the proposed project, exceed a yearly average of 20% over the 
last type 5 year.  Awardees operating within a modular budget format 
may round up their request to the next higher module in the first 
competing year, and may also request one time equipment funds. If any 
year exceeds $250,000, a non-modular budget should be requested. 
Notwithstanding any other calculation, however, renewal applications of 
grants with existing modular budgets cannot request in excess of a two 
module increase in the first competing year.

In cases where the last non-competing year budget may be substantially 
lower than other previous years (e.g., some epidemiological and 
clinical research programs), if the nature of the new research requires 
budget increases for one or more years above the 20 percent rule for 
the last non-competing year, applicants may cite the average yearly 
direct cost as a base for the new cap.  Applicants interested in this 
option are required to contact the NCI program director for the 
currently funded grant before submitting applications.  Prior approval 
of the NCI is required before any application with a budget exceeding 
these guidelines can be accepted for review.  

Some other examples of budget calculation questions may be found on the 
NCI Internet at:  
(http://deainfo.nci.nih.gov/grantspolicies/newbudgetcap-faq.htm)

For purposes of this policy, the small number of remaining R29 FIRST 
awardees seeking competitive renewal of their awards as a type 2 R01 
may submit a proposed budget without reference to their last non-
competing year level of support, that is, without cap.

Where currently active supplements have been awarded to the ongoing 
parent R01/U01 award, the supplemental direct cost may be added to 
calculate the new base of the competing continuation request only if 
the work funded by the supplement will continue in the new project 
period.   After a competing award has been issued, with prior approval 
from NCI, awardees will be eligible to apply for other future competing 
and administrative supplements, even if the additional request exceeds 
the original cap.

These caps in themselves collectively represent a level of potential 
future budget increases that, if recommended for full funding in even a 
bare majority of cases, would still require further mandated reductions 
of awards to fit within the likely parameters of the NCI budget.  All 
awards, therefore, continue to be subject to future overall NIH and NCI 
cost containment principles in effect at the time of issuance.

Applicants are also cautioned that any grant application requesting in 
excess of $500,000 direct cost in any year requires approval prior to 
submission.  See: http://grants.nih.gov/grants/guide/notice-files/not98-030.html.
 
These new limits on growth are consistent with the current NCI cap on 
type 2 P01 applications, which remains in force (Reference: 
http://grants.nih.gov/grants/guide/notice-files/NOT-CA-00-010.html).  
Please note also that, for U01 cooperative agreements at any budget 
level, prior written approval of the NCI is required for permission to 
submit a competing continuation (type 2) application as a U01. 

To assure careful consideration, any request requiring prior approval 
should be received by the NCI at least 30 calendar days prior to the 
actual receipt date. Competing continuation applications requesting 
increases in excess of these guidelines without prior approval will be 
returned without review and may result in loss of a full review cycle. 
In such cases, interim administrative supplements will not be provided 
to bridge gaps due to failure to comply with these requirements. 
Investigators considering submission of competing continuations 
affected by this policy are urged to contact their current NCI Program 
Director for assistance prior to the preparation of a formal 
application. 

INQUIRIES
 
For questions or further information, contact your individual NCI 
program administrator or grants management specialist (listed on the 
current Notice of Award) or:

Associate Director for Referral,
Review and Program Coordination
Division of Extramural Activities
National Cancer Institute
6116 Executive Boulevard, Room 8051
Bethesda, MD  20892-8328
Telephone:  (301) 435-5655
Fax:  (301) 402-0742
Email:  db85g@nih.gov

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National Institutes of Health (NIH) 9000 Rockville Pike Bethesda, Maryland 20892