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November 7, 1997 - Revision to OMB Circular A-21

Mr. Gilbert Tran
Financial Standards and Reporting Branch
Office of Federal Financial Management
Office of Management and Budget
725 17th Street, N.W.
Washington, D.C. 20503

RE: 62FR47722 -- OMB -- "Proposed Revisions to OMB Circular A-21"

The American Society for Microbiology (ASM) is submitting the following comments in response to the proposed revisions to OMB Circular A-21, "Cost Principles for Educational Institutions," published in the September 10, 1997 Federal Register. The ASM is the largest single life sciences organization in the world, representing 43,000 members, many of whom are engaged in research in academic institutions. A number of significant revisions have been made to OMB Circular A-21 since 1991, and the ASM has commented previously on the changes proposed on December 9, 1992 and February 6, 1995. With respect to the September 10, 1997, proposed changes, the ASM wishes to address the following comments on the treatment of specialized service facilities and specifically, to research costs associated with animal care facilities. The ASM is concerned about research costs related to animal research and animal care facilities, which are included in the list of examples of a specialized service facility in the September 10 Notice.

The revisions to OMB Circular A-21 that were finalized in 1996 have shifted most costs of animal care to the direct costs category, which is having a major impact on the research budgets of investigators who use animals. The increased costs (per diem and other costs) make it almost prohibitive to perform animal research, while retaining sufficient monies for personnel and supplies, particularly for grants that were funded prior to implementation of this new directive. We recommend that the costs of animal facility maintenance, disease detection and prevention, and salaries of key personnel (e.g., specialists in laboratory animal medicine, administrators to insure compliance with appropriate regulations, business managers, purchasing agents, and security), should be allocated to the facility operations and maintenance portion of indirect costs. The costs of purchasing, breeding, husbandry (e.g., caging, feeding, room sanitation and cage washing) and experimental procedures should be charged directly to each investigator. The implementation of these principles could reduce the variations in rates among institutions.

The tremendous variation in animal care costs among institutions is a major problem. Costs depend on the adequacy of the animal facilities, program quality and diversity, research requirements, labor and many other factors. However, the variability in rates arises not only from differences in local costs for services and facilities and how these costs are allocated, but also the degree to which animal resources are subsidized by each institution. Reliable data are needed on the actual costs of animal care minus any local subsidies (i.e., the unsubsidized per diem rates) and how these costs differ among institutions so that reasonable benchmarks can be established. To the best of our knowledge, there are no such comparative studies currently available or planned.

Many of the nation's animal facilities are neither modern nor highly efficient. The new era of animal genomics has now unduly stretched the housing capacity of many aging facilities, which are very costly to operate because they are inefficient and inflexible in meeting the needs of multi-user constituencies. Housing highly unique, irreplaceable animals in overtaxed facilities drives up operating costs, increases the risks of equipment failures and encourages the spread of pathogens. The overall risk from inadequate physical infrastructure, therefore, must be measured in terms of the quality and stability of laboratory animals, the research for which they are used, and in the costs (scientific and monetary) to investigators and their institutions.

Attached are a background paper and a resolution on Animal Costs and Care which was approved by both the Council of the National Institute of Allergy and Infectious Diseases (NIAID) and the governing Council Policy Committee of the ASM.

As advances continue to be made in genomics, animal usage will increase and consume an increasing share of the already constrained resources for biomedical research. The importance of this issue for biomedical research resources is underscored by the fact that at least 50 percent of the grants funded by the National Institutes of Health (NIH) use vertebrate animals. We request that careful consideration be given to the above issues to determine the cost accounting principles for allocating the costs of animal research and care.