(The following is an edited version of an article that appeared in the Winter 1995 issue of the newsletter Grants and Assistance News. The article, reprinted here with the permission of the editor, focuses on the impact and effects of a governmental shutdown on the higher education community.)
Perhaps the hardest effect [of a shutdown on the higher education community] to quantify is the sense of frustration both on the part of higher education and governmental employees. Some of the agencies continued their normal load during a shutdown (Department of Agriculture), some a partial load (Advanced Research Projects Agency), and some came to a virtual halt (National Science Foundation).
The response of individual agencies was so dependent upon the status of appropriations bills and the designation of "essential" personnel that it was literally a jigsaw puzzle to many faculty and research administration staffs to guess which offices would be staffed and able to carry out their normal activities.
One of the reactions heard over and over at universities was the misnamed categorization of only certain employees as "essential" when it was clear that far more than those individuals were necessary for reasonable functioning of the federal government and its constituencies.
In looking at the quantifiable impacts of the shutdown on universities, any list includes (but is not limited to) the following:
- Delay in processing grant awards, forcing institutions to "front-end" the cost of such activities. With the ability of the institution to invoke the pre-award costing allowance provided by OMB Circular A-110, this is less onerous than it was during previous shutdowns. Nonetheless, institutions are forced to use their own funds during such a period, and can seek reimbursement only when the government reopens and awards are received.
- Delay in negotiation and award of contracts. The problem is more serious for contracts since during a shutdown many contract negotiations are suspended. If these negotiations are for follow-on activities, an institution (to maintain the integrity of the work) must use its own non-reimbursable funds to sustain the personnel on the project until such time as the renewal can be effective. Institutions try to negotiate pre-award costs, but with only very limited success.
- Whether institutions should encourage faculty to postpone large dollar purchases during the period of a shutdown. Because institutions must be good stewards of their funds, many institutions encourage restraint in making large dollar purchases during a shutdown. However, during a shutdown institutions continue to support personnel paid from research funds.
- Inability of research faculty and staff to communicate with their governmental peers. This is a little-discussed but significant problem during a shutdown. Governmental agencies must deny access to facilities (such as computer facilities at NASA) to research staff and, while on furlough, the normal contact on issues of scientific and research interest is generally suspended. The degree of impact on the research staff of institutions of higher education can vary depending upon the location and status of their federal counterparts, whether the work is being carried out is supported by grants, contracts, cooperative agreements or other arrangements.
- Potential impact on reimbursement or drawdown of federal funds to an institution. Any shutdown causes institutions to seek reimbursement for as many outstanding expenses as possible and to draw down the maximum allowable on letters of credit. Many institutions are acutely aware of the amount of federal funds they expend and planning starts early for what happens when or if the government is unable to process payment vouchers or letter-of-credit drawdowns. Estimates of federal expenditures range from several thousand to over a million dollars per workday-an expense, albeit temporary, which must be borne by institutions.
Not included in these brief descriptions is the cost of personnel for increases in workload at both the institution and agency level. When the government is unable to make awards, institutions must find alternative means to avoid interrupting the progress of ongoing research. The same is true when the government is unable to reimburse expenses. The cost of a shutdown, though, is far greater than the dollars involved: it goes to the integrity and efficiency of the process. When agencies send out letters announcing that awards will be delayed because of uncertainties in funding levels, when personnel are unavailable for discussions and to respond to questions, when meetings and conferences are negatively impacted by the inability of federal officials to attend and participate, when peer review panels don't meet, the effects damage both components of the partnership. This is particularly frustrating when many people on both sides know the shutdown occurred because of issues beyond their control.
A version of this article appeared in MIT Tech Talk on January 24, 1996.