Larry Clark, acting director of the Ocean Sciences Division at NSF sent a letter to UNOLS seeking advice on how best to implement cost reductions in their ship operations budget. They are projecting the need to cut between $5M and $8M from the ship operations budget below what was spent for FY05. The factors that create this problem include division budgets that were reduced in FY05 and are projected to be flat at that reduced level for the next three or four years; a resulting projected reduction in future demand for NSF ship time; an increase in the cost of operating the academic (UNOLS) research fleet; some historical overcapacity within the fleet; and the requirement to fund renewal efforts for mid-sized infrastructure from the division budget. Recommendations from UNOLS are requested prior to the summer scheduling meeting planned for July 20th. (A pdf file with Larry Clark's complete letter is available as an appendix to the March 2005 UNOLS Council meeting)
In response, the UNOLS Council formed an ad-hoc committee consisting of Marcia McNutt (chair), Denis Wiesenburg and Eileen Hofmann to formulate draft recommendations for consideration and finalization by the UNOLS community and Council. They recently published their task statement to the community that lays out how they intend to proceed. Working with the ship schedulers, ship operators and funding agency representatives the committee planned to make a best estimate of projected fleet utilization and costs for 2006, compare that to projected budgets, get costs and recommendations for lay-ups, retirements and other cost saving measures and then formulate short and long term recommendations. The committee would seek ship operator and science community input on their recommendations and assumptions. Short term recommendations were to be formulated and sent to the UNOLS Council by June 1st and long term recommendations by August 31st, however, more time will be needed to finalize the short term recommendations. (Ad-hoc committee task statement)
A status report based on information gathered to this point, primarily from preliminary schedules posted by the UNOLS ship operators has been created. We have also identified some specific areas where additional information is required to help formulate the UNOLS recommendations. The update also attempts to lay out some of the major issues and includes an outline for the recommendations to be made to NSF by UNOLS. You should have received a summary by email that has directed you to this page. That short summary and the more complete update document are posted here for you to read. Please take the time to review this material and then consider providing your feedback and recommendations. You may send an email to the .
Short Summary Update - May 20, 2005
(126kb PDF)
Complete Update Report - May 20, 2005 (1.4mb
PDF)
Thank you for your help in developing our community based recommendations to NSF
Update daily rate estimates, estimate costs for ship lay-ups and provide recommendations regarding lay-up procedures. Please download the cost estimate spreadsheet and return to the UNOLS Office with your estimates and recommendations.
The balance between facilities budgets and science budgets should
be examined in order to make recommendations about whether or not the current
plan is the right approach. The budget submission states that for the Ocean
Science Division, facilities represent 41% of the budget, however another way
to examine the balance is to view research fleet operations budgets as a percentage
of research and education budgets. The table below shows that science funding
was cut drastically in 2005 (partly to pay for 2004 fleet operations) resulting
in a higher ratio between fleet operations and science. In 2006 an equally dramatic
cut is being applied to fleet operations resulting in a lower ratio than in
2004. What should the balance between these two components be and should changes
be made quickly to arrive at a new balance. For example, a more gradual reduction
of ship operations costs might make more sense in bringing about a stable balance
in this era of reduced and flat budgets. What are your recommendations
regarding the balance between facilities budgets and research/education budgets?
References: NSF 2006 Geo-Sciences Budget and
NSF 2006 Facilities Budgets
For a list of recent NSF Budget submissions and appropriations go to: http://www.nsf.gov/about/budget/
| Fiscal Year |
2004 | 2005 | 2006 |
| Research Fleet Operations (includes ship ops, tech, etc.) |
72.5 | 72.2 | 66.9 |
| Research and Education Grants | 194.85 | 181.64 | 190.61 |
| Research Fleet Operations as a percentage of Science Funding | 37% | 40% | 35% |
From examining the NSF budget submission for ocean science facilities support it is clear that within a budget that is flat from FY05 to FY06 ($83.2M), money is being shifted from current operations and maintenance to “new infrastructure.” This $5.3M dollar shift in funds pays for the design efforts for new Regional Class research vessels and other renewal projects such as the Langseth and replacement Human Occupied Vehicle (HOV). This “mid-size infrastructure” was programmed to be funded from the Ocean Sciences division (OCE) funds during a period when NSF and OCE budgets were increasing and this new infrastructure would not come at the expense of existing science or facilities operations budgets. That is no longer the case and it is now necessary to take funding from either science budgets or current operations and maintenance. The community and UNOLS, in particular, have been a strong voice for fleet renewal efforts and have supported the leadership and progress being made by NSF and the Navy in this area. At the same time, budget realities make it necessary to examine the assumptions regarding the allocation of funds for these efforts versus current operations and science funding. Several members of the community voiced strong opposition to the plan to use ONR science funding for new infrastructure and the same arguments may well apply to the NSF budget plans. What is your recommendation with regards to continuing with the current pace of fleet renewal under existing budget constraints?
Academic Research Fleet Funding Profile |
|||
(Dollars in Millions) |
|||
| Implementation | Operations & Maintenance | Total, NSF | |
| FY 2001 | 2.30 | 56.60 | $58.90 |
| FY 2002 | 2.30 | 59.60 | $61.90 |
| FY 2003 | 3.00 | 62.20 | $65.20 |
| FY 2004 | 10.00 | 72.50 | $82.50 |
| FY 2005 Current Plan | 11.00 | 72.20 | $83.20 |
| FY 2006 Request | 16.30 | 66.90 | $83.20 |
| FY 2007 Estimate | 19.50 | 71.00 | $90.50 |
| FY 2008 Estimate | 19.80 | 73.90 | $93.70 |
| FY 2009 Estimate | 20.80 | 75.50 | $96.30 |
| FY 2010 Estimate | 21.47 | 77.39 | $98.85 |
| NOTE: Operations estimates for FY 2007 and beyond have been developed based on current cost profiles and are not intended to reflect actual budget requirements. They will be updated as new information becomes available. | |||
Decisions about lay-ups and retirements will affect the current and future budgets. Lay-ups leave capacity in the fleet that allow for dealing with fluctuating demand, but come at a cost. Vessels need to be maintained so they are safe and effective when brought back into service, retain their inspection and classification certifications and retain their capability for science support. A key element in being able to bring a ship back into service is the availability of experienced and qualified crew. Lay-ups that involve letting crew go run the risk of losing these experienced personnel to other jobs. To some extent this can be mitigated by utilizing crew on other ships within the fleet through cooperation by the ship operators, but extensive lay-ups will always place a burden on our crews and technicians that they may not be able to sustain for long. On the other hand, retirement of vessels will result in the permanent loss of capability in terms of both the ship and its crew. Fewer ships will mean less flexibility in scheduling cruises during periods of peak demand within a year or during a year of high demand. So even if we are in a period of extended low demand, certain times of year or in certain areas fewer ships will reduce our ability to effectively schedule some projects as required or requested. Decisions about lay-ups and retirements should be made taking into consideration these longer term impacts. What are your recommendations with regard to retirement of existing vessels versus temporary lay-ups?
An examination of costs and operating procedures should be made in an effort to find other ways to maintain existing capabilities and capacity within existing budgets. The cost of fuel, crew, maintenance and new regulations all have an impact on the number of days at sea that can be afforded within the budget. Losing ships and funding to other expenses will have a direct impact on our technicians and crewmembers and they should be consulted about solutions to these budget problems. Looking for ways to mitigate some of the current cost increases such as fuel prices and new regulations should be examined. Supplemental funding for high fuel costs have been received in the past, the use of Navy fuel sources and other solutions may all help keep operating costs down. Relief from some regulatory requirements and costs might be possible and should be examined. Recommendations to NSF and ONR to work with NOPP to find solutions to some of these budget issues will be considered. What recommendations do you have regarding cost reductions?