[Office-of-research] Additional Information: Impact of Governor's Executive Order on Sponsored Awards from the State

Bruce Morgan bruce.morgan at ucr.edu
Fri Aug 1 13:56:39 PDT 2008

The UCOP Research Administration Office has had further contact with the
State of California Department of General Services and has issued a
statement regarding the suspension of contracts.  


Specifically, at this time, it is UCOP's understanding that the contract
suspensions are not just a suspension of payment until the State Budget is
passed.  Rather, it is a suspension of work (i.e., stop work order) and a
moratorium against incurring any costs during the suspension period (i.e., 

if any expenses are incurred prior to contract reinstatement, UC will not be


As more information is made available to us, I will pass it along.


Bruce Morgan

Assistant Vice Chancellor for Research


From: Bruce Morgan [mailto:bruce.morgan at ucr.edu] 
Sent: Friday, August 01, 2008 9:28 AM
To: 'office-of-research at lists.ucr.edu'
Subject: Impact of Governor's Executive Order on Sponsored Awards from the
Importance: High


Yesterday, the Governor signed an Executive Order that suspends personal
service contracts effective July 31, 2008.  The UCOP Research Administration
Office has been in contact with the state Department of General Services
(DGS) which confirmed that no work shall be performed or costs incurred on
suspended contracts until the suspension is officially lifted. 


Late yesterday, UCR received its first Suspension Notice from the California
Department of Food and Agriculture, and we expect to receive more letters
over the next few days from several state agencies.  Following is the text
of a suspension letter:


"On Thursday, July 31, 2008, the Governor's Office issued Executive Order
S-09 -08. This Order requires that except for services and functions of
state government deemed critical and exempt, all State agencies and
departments under the Governor's direct executive authority to immediately
suspend the activities of individuals providing services under contract
July 31, 2008.


Under this Order, your contract is not exempt.  Therefore, performance under
this contract is hereby immediately suspended.  No work shall be performed
or costs incurred under this contract until further notice."


UCOP executive management is aware of this situation and is expected to
issue guidance shortly.  Once the Office of Research receives guidance from
UCOP on how to proceed, we will immediately pass that information along.  


In the meantime, departments and Principal Investigators with contracts and
other awards from the State of California, should immediately begin
considering the impact of contract suspensions.  In particular, the
suspensions may result in the need to shift the effort of personnel from
state contracts to other sponsored awards or to department/college funds.
Please note that in shifting personnel effort to other sponsored awards, it
is important to ensure that the costs associated with such effort are
allowable on the sponsored awards that will be charged.  For such costs to
be allowable, the personnel effort must have directly benefited the
sponsored award.  Other factors that may affect allowability include the
award terms and conditions, UC/UCR policies and 2 CFR 220 (Cost Principles
for Educational Institutions).


Please contact the Contract and Grant Officer
<http://or.ucr.edu/home/Staff.aspx?t=3>  assigned to your unit with any
questions that you may have regarding the suspension of state contracts.



Bruce Morgan

Assistant Vice Chancellor for Research


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