SALARIES AND EXPENSES $170,040,000

The FY 2002 Budget Request for Salaries and Expenses (S&E) is $170.04 million, an increase of $9.50 million, or 5.9 percent, over the FY 2001 Current Plan of $160.54 million.

The requested increase will cover costs for statutory pay raises, space rental increases, and travel. In addition, the increase will be used to improve the productivity of NSF's workforce through information technology (IT) enhancements and create an Academy for training, education, and development of staff at all levels. The requested level also supports 1,150 full-time equivalent (FTE) employment and provides for existing administrative contractual services. Note that the Office of Inspector General is described in a separate section of the justification.

(Millions of Dollars)

Totals may not add due to rounding.

The S&E appropriation includes funds for staff salaries, benefits, travel, training, rent, advisory and assistance services, communications and utilities expenses, supplies, equipment, and other operating expenses necessary for management of the agency's research and education activities. The FY 2002 S&E Budget Request provides support for the following activities:

• Personnel Compensation and Benefits (PC&B): Resources in this category provide funding for salaries and benefits of federal employees. PC&B costs increased from $105.21 million in FY 2000 to $113.35 million in FY 2001, and these costs are anticipated to increase by $4.16 million, or 3.7 percent, totaling $117.51 million in FY 2002. Within the proposed increase, PC&B will provide the resources to maintain the current FTE level of 1,150, including comparability and locality pay increases and higher benefits costs.

• General Operating Expenses (GOE): Resources in this category constitute the remainder of the S&E appropriation. GOE funds the entire range of operating expenses and travel that are necessary for the agency to administer its programs. GOE costs will increase by $5.34 million, or 11.3 percent, totaling $52.53 million in FY 2002.

Within the proposed increase, $4.33 million will provide the resources to improve the agency's information systems technology - enhance the information infrastructure, promote e-business opportunities, and provide for increasing IT contractor costs. This increase also funds rental payments to the General Services Administration for existing and newly acquired space and other general operating expenses to administer the agency's programs. In addition, an increase in travel funds by $1.01 million is necessary to continue supporting the merit review process and to increase oversight as well as outreach travel.

Personnel Compensation and Benefits

Overall, PC&B is the single largest component of the S&E appropriation. PC&B costs for FY 2002 amount to $117.51 million, an increase of $4.16 million over the FY 2001 Current Plan.

(Millions of Dollars)

Totals may not add due to rounding.

As part of the overall PC&B request, the components relating to this increase are:

• $2.80 million for comparability and locality pay increases;

• $810,000 for within-grade increases, career ladder promotions, senior executive service and general workforce performance management system bonuses; and

• $550,000 for benefits increases that include higher agency contributions to the Federal Employee Retirement System (FERS) because a higher percentage of the NSF workforce is covered by FERS than the Civil Service Retirement System plan.

Staffing

NSF has always prided itself on its talented, dedicated workforce, including visiting scientists, engineers, and educators. However, such a workforce is more challenging to maintain in a competitive job market and as an older, experienced generation retires. In addition, the use of new technology, which has helped fuel NSF's significant increase in productivity the past few years, has developed to the point where a shift in job design and workforce employment is taking place.

In recent years, as technology has automated simple functions, NSF has transitioned obsolete clerical jobs to vital technical ones. In order to continue serving and supporting a more complex portfolio, NSF must augment those technical jobs with new kinds of expertise in systems development, design, and deployment. It also means that NSF must continue to dedicate resources to staff training each time a new system is developed and implemented. Thus, management of more complex programs requires that there be a richer mix of program staff with more than just scientific expertise.

The NSF FY 2002 staffing level remains equal to the FY 2001 Current Plan level of 1,150 FTE.

General Operating Expenses

General Operating Expenses (GOE) fund a broad range of operations necessary for the Foundation to administer its programs. The FY 2002 request for GOE is $52.53 million, an increase of $5.34 million from the FY 2001 level of $47.19 million. The largest single component of GOE is space rental, which will increase to $17.2 million based on GSA's negotiated leasing cost for FY 2002. To enhance the productivity of the NSF staff, the request will fund information technology initiatives designed to improve proposal and award processing, initiate an Academy to facilitate employee development and training, and provide travel funds for staff to effectively administer programs.

The request also provides for the management and maintenance of the operational components of the FastLane Project. This project was designed to reengineer all business interactions between NSF and the science and engineering research and education communities. FastLane streamlines and automates operations involved in the submission and review of research proposals, issuance of grants, cash management, and post-award administration. Currently FastLane is used for 99.8% of proposal submissions. To maintain the system, NSF must continue to support and enhance FastLane operations and maintenance infrastructure, expand the Help Desk hours, and provide continued training to NSF's personnel in its use. The required infrastructure includes high-speed servers, storage, and memory. Most importantly, the infrastructure requires significant investments in system security and contracts to maintain and enhance the FastLane programs.

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Totals may not add due to rounding.

Travel

The Foundation's science, engineering, and education research programs continue to emphasize more complex, interrelated sets of activities. The activities require NSF staff to interact and engage a broader, and often new, range of participants. These communities and constituencies often require assistance from and coordination with NSF staff in order to ensure compliance with the Foundation's administrative and programmatic requirements in proposing and carrying out their awards. This interaction and coordination takes many forms. It includes increased pre-award outreach to inform new communities of the NSF role in providing research funding; pre-proposal advice, complex pre-award negotiation; and requires attendance at society meetings, site visits, and workshops.

The travel funded in the Salaries and Expenses account will continue to provide travel for staff to inform researchers across the nation about NSF's programs; site visits to manage and oversee projects and facilities; and attendance at symposia, conferences, and meetings to maintain a presence with new and emerging disciplines and partnerships. In addition, funding is requested for increased oversight activities, especially for new grantees, and for enhanced outreach activities associated with FastLane, travel for the National Science Board, and the Office of the Director to participate at conferences and meetings for science policy planning.

Budgeted at $5.0 million in FY 2002, Travel increases by $1.01 million from the FY 2001 level of $3.99 million. An increase in travel in FY 2002 is necessary to continue to support the merit review process while increasing the ability for oversight and outreach travel. Good management is critical to the success of the research and education activities that we support, and proper and sufficient oversight is vital to the process. This requested amount also will assist in assuring both a reliable merit review process and the oversight recommended by the agency's Inspector General. Inspector General reports continue to cite the lack of travel funds for oversight of NSF awards as a major management challenge. In addition, management reviews call for more oversight travel.

Space Rental

Budgeted at $16.56 million in FY 2001, physical infrastructure costs increase by $640,000 in FY 2002 to a total of $17.20 million. These costs include charges by GSA for the Foundation's headquarters location in Arlington, Virginia, two floors of space in an adjacent building, and an additional 1,600 square feet of space in the headquarters building will be acquired by the end of FY 2001 to alleviate severe space problems.

Information Infrastructure

Information infrastructure costs are budgeted at $15.53 million in FY 2002, increasing by $2.0 million from the FY 2001 level of $13.53 million. This request continues the Foundation's major investment in new technology to support improved business operations and to keep pace with an increasingly complex workload. Reengineering activities throughout NSF are focused on changing business practices to streamline operations and improve efficiency. This investment has produced significant results, including successful efforts to automate proposal and award processes and the development of improved financial systems. Currently NSF electronically disburses about $3 billion to researchers annually and another $121 million to staff for salaries and travel reimbursements. Approximately 99% of all NSF payments are done through electronic funds transfer. The requested increase continues NSF's efforts to complete and extend the automation and streamlining of proposal processing, award administration, and cash management activities currently underway.

NSF's information infrastructure is characterized by powerful central databases and file-servers as well as distributed desktop workstations that support a wide range of automated administrative and programmatic work processes. These processes include mission activities such as proposal and award management, financial management, electronic mail, electronic timekeeping and record-keeping systems, and data analysis. NSF is replacing its large central mainframe computer with a client-server computing environment that allows more processing to be performed at individual workstations rather than on the mainframe. The migration is scheduled for completion by the end of FY 2001.

In order to keep pace with technological advances and support the new client-server based systems, the NSF technical infrastructure (including desktop computers) must be upgraded on an on-going basis. NSF pursues an active program of assessing emerging technologies to determine their applicability to NSF operations and their potential to improve efficiency. By using all available processing power, and by upgrading the processing power available on the desktop, NSF staff will be able to take full advantage of the benefits of new systems and applications as they become available. Database and file servers to support enhanced client-server applications will be installed to replace aging technology and provide an adequate technical infrastructure for systems under development.

Other ongoing information infrastructure costs include operation of a central computing facility; maintenance of hardware and software; management of the NSF intranet and local area network; operation of a customer service center; software development services to enhance and maintain current applications; and electronic mail.

With the technological advances of the client server architecture and the Internet, NSF has implemented FastLane for its external customers and major client server applications including the Proposal and Reviewer System and Awards System for its internal customers. In FY 2001, the Payroll and Finance systems will be implemented in a client server environment, thus completing the major effort of migrating our systems from the mainframe. The completion of this effort is not an end, but a beginning. The years of effort were designed to provide NSF with the ability to begin making some fundamental changes in how we accomplish our work and how we interact with our communities. We have worked for years and invested considerable effort in making NSF a recognized IT leader in the government. We must continue to enhance our current systems and develop new systems in a secure and accessible environment to meet future demands as NSF continues its growth. Some of our goals include: a completely paperless processing environment at NSF; an integrated and comprehensive proposal processing environment; better communications with our customers; any time, any place information access and work environments; enhanced electronic publishing and information dissemination capabilities; and continuing the upgrade of the Foundation's desktop computer inventory.

Other General Operating Expenses

Budgeted at $14.8 million in FY 2002, other GOE increases by $1.69 million from the FY 2001 level of $13.11 million. Funds in this category cover charges for telephone services and postage, employee training, equipment repair and maintenance, mail handling, printing and reproduction, office supplies, and other administrative expenses. The increase will cover anticipated contractual increases and other expenses for administrative equipment and initial start-up costs for an Academy to enhance workforce skills.

The table below shows the planned distribution of general operating expenses by object class and is followed by brief detailed explanations of each category.

(Thousands of Dollars)

Totals may not add due to rounding.

Description of categories:

• Travel and Transportation of Persons is discussed at the beginning of the GOE section.

• Transportation of Things consists of household moves associated with bringing new scientists and engineers on board. No increase in this account is planned in FY 2002.

• Rental Payments to GSA, which increase by $636,000 in FY 2002, includes the rent charged by GSA for NSF's facility in Arlington, Virginia and two floors in an adjacent building. The FY 2002 increase is required to fund GSA's estimate of an increase in the rate paid by NSF for currently occupied space, plus additional space that will be leased at the end of FY 2001 in the headquarters building to alleviate severe space problems.

• Communications, Utilities, and Miscellaneous Charges include all costs for telephone lines and services, both local and long distance, postage, and rental charges for leased copiers. These costs increase by $254,000 in FY 2002, to fund enhancements (i.e., wireless, computer telephone integration) to NSF's telephone system that was acquired in FY 2000. With the enhancements, NSF will have a state-of-the-art system that will be substantially easier to administer and will provide improved functionality to staff.

• Printing and Reproduction include contract costs of composition and printing of NSF's publications, announcements and forms; and printing of stationery and specialty items. The increase represents restoration of funding to FY 2001 level before rescission.

• Advisory and Assistance Services include training for all Foundation staff, contracts for position classifications, security investigations, and related services. These costs increase by $361,000 in FY 2002 to fund initial costs of an Academy that is being designed to provide professional development for staff in order to build a workforce with the competencies to meet future challenges.

• Other Services includes warehousing and supply services, mail handling, addressing services, equipment repair and maintenance, carpet installation and repair, renovation costs, furniture repair, contract support for conference room services, and miscellaneous administrative contracts. These costs increase by $602,000 in FY 2002 for next generation video-conferencing in support of the e-business GPRA goal to facilitate an internal paperless process.

• Purchases of Goods and Services from Government Accounts include reimbursable services purchased from GSA. These costs primarily include guard services and off-hours heating and air conditioning support. The increase represents restoration of funding to FY 2001 level before rescission.

• Medical Care includes costs associated with the health services contract, providing limited on-site medical services to the agency's staff. The increase represents restoration of funding to FY 2001 level before rescission.

• Operations and Maintenance of Equipment includes management and operation of the central computer facility 24 hours/day, 365 days/year; operation of the customer service center and FastLane help desk; maintenance of database server hardware and related peripherals; software licensing fees; data communications infrastructure and network systems support; electronic mail support; and remote access (e.g., Internet and World Wide Web). The increase of $596,000 planned for FY 2002 will cover anticipated contractual increases, including sharp increases in IT labor rates, and provide funding for the operation and maintenance of FastLane; implementation of Office 2000 and Windows 2000; increased e-mail resources; and increased funding for security.

• Supplies and Materials include office supplies, library supplies, paper and supplies for the NSF central computer facility, and miscellaneous supplies. The increase represents restoration of funding to FY 2001 level before rescission.

• Equipment costs include new and replacement computing equipment, desktop computers, data communications equipment, video teleconferencing equipment, office furniture, file cabinets, and support equipment such as copiers and audio-visual equipment. Also included are software development costs associated with developing and maintaining central application systems that support proposal, award, financial, and administrative activities. These costs increase in FY 2002 by approximately $1.87 million to support the following activities: better integration between NSF's internal systems and FastLane; improved system performance by utilizing new or improved programming tools; programming associated with electronic signatures; programming associated with accessibility and security; continue to upgrade and increase the speed of NSF's LAN; e-mail hardware and software upgrades; upgrade servers for FastLane and the new client server systems; acquire disk storage units and tape backup to support electronic records; upgrade and increase the speed of the firewall; prototype an IPTV initiative; training room upgrades; and introduction of smart card technology.

• Reception and Representation expenses do not increase over the FY 2001 level.