Transition in Government Administration and Agency Leadership

A temporary restraining order was issued to pause implementation of the National Institutes of Health 15% indirect rate pending further review by the courts. We will continue to assess the impact of a potential implementation of this policy to our campus. We will monitor and provide updates on this topic as it develops.

On Feb. 7, the National Institutes of Health released guidance to set a standard indirect rate of 15% across all NIH grants (the current indirect or facilities and administration rate at OSU for on-campus organized research is 48.5%). Read the memo. While this guidance is already being challenged in courts, this rate is expected to  be applied to new grants issued after Feb. 7, and for all existing grants to institutes of higher education. We will be reviewing how this policy change at NIH will impact the OSU research enterprise as well as proposals under development, proposals currently under review at NIH and existing awards. NIH did not address the key question about whether this change will result in more direct costs to a project or a reduction in budget to the project. NIH did not address how the real and necessary costs that are currently paid by indirect costs will be supported. NIH did not address how our subawards on NIH projects will be impacted by this change. NIH did not address that OSU's F&A rate is carefully reviewed and approved by their parent organization, the Department of Health and Human Services, after a long process justifying the real and needed costs that are supported by that rate.  

NIH Indirect, also called F&A, cost limit FAQ: 

How does the NIH 15% indirect rate limit guidance impact my proposal or project?

The NIH guidance does not detail if this change will result in a rebudget of indirect costs to direct costs or a reduction in the budget for the project. We expect more information from NIH on this matter.

What if my NIH project has subawards?

The NIH guidance will result in a decreased F&A rate to subawadees on NIH projects.  The memo did not address if this will result in a decrease in the budget for subawards or a rebudget to allow for more direct costs. The NIH memo appears to only apply the lower rate on existing projects to institutes of higher education, so it is not clear if different types of subawardees will be impacted differently.  

Where does the OSU indirect rate of 48.5% come from?

Every three to five years, OSU goes through a long and arduous process to determine our F&A rate in partnership with NIH's parent organization, DHHS.  We carefully measure our real and necessary costs of supporting research infrastructure for different types of projects and create separate rates that fairly assign those costs to on-campus versus off-campus projects, research projects versus outreach activities, and specialized programs, such as research vessel projects. 

What are indirect costs used for at OSU?

The reimbursement of indirect costs helps pay for facilities, equipment and staff that are essential to supporting grants. More information can be found from the Council on Government Relations.

The NIH memo references lower rates allowed for nonprofits. Why do we accept limited F&A rates from nonprofits?

Federal indirect funding pays for the backbone of our administrative and facility research infrastructure at this university and throughout the country's research enterprise. Nonprofit projects are meant to make more efficient use of that existing infrastructure when federal projects are not fully utilizing the space. For example, when a lab whose construction was funded by federal indirect costs is not fully utilized for federal projects, a nonprofit funded project is utilized to maximize the efficient use of that space between federal projects rather than letting it sit idle.  

To follow up on the Feb. 5 update on the pause in agencies issuing funding increments we wanted to provide detailed instructions on how principal investigators can see the obligated funding on their award. PIs can use the OSU Grant Reporting System (GRS) to determine the total agency funding obligation. To do so, navigate to the GRS home page and choose “my grants” from the upper right corner. Select the grant index for which you wish to determine the obligated funding, and GRS will show the current financials for that index. The “budget” column will show the cumulative budget which is equal to the obligated funding by the agency.

Additionally, the National Science Foundation has updated its website for the NSF implementation of recent executive orders with new frequently asked questions. Read the FAQs.

Funding

We continue to advise projects with existing obligated funding to proceed with their planned project activities. Many federal grants are funded in increments, meaning each budget year the federal agency sends a grant amendment obligating the next year's funding.  We are seeing a pause in federal agencies issuing funding increment amendments. We do not have guidance from the agencies on when incremental funding will be released. Please monitor the current end date and obligated funding on your active projects while agencies determine their path forward. Please reach out to [email protected] if you have any questions.

Data access

If you encounter issues accessing federal data repositories in your research or teaching activities, please contact [email protected] and share the relevant details. We have not received guidance from our federal partners regarding issues around access to data, but we will continue to monitor the situation.

Two court cases challenging the Executive Orders and the Office of Management and Budget's temporary pause continue to develop.  Agencies are notifying PIs today about a Temporary Restraining Order.  This restraining order states that:

• All federal agencies cannot pause, freeze, impede, block, cancel or terminate any awards or obligations on the basis of the OMB memo or on the basis of the recent EOs,
• Foregoing prohibition applies to all awards or obligations, and
• Agencies may continue to exercise their own discretion to pause awards or obligations in compliance with the award or agreement and not based on the OMB memo or the recent EOs. (For example, an agency may pause an existing award for failure to comply with the terms of the award.)

Although this order lifts the general pause on reviewing proposals and issuing awards, we continue to see delays in the grant review process and agency communications.

Payments are now processing as normal, including the NSF payment portal.  

The Office of Management and Budget memo temporarily pausing new and existing grant funding was rescinded in its entirety by OMB on Jan. 29.  This means federal funding on new and existing grants is expected to continue unless the funding agency explicitly indicates otherwise.

As we continue to monitor and assess the changing federal landscape, our continued guidance is for our researchers and faculty to continue their research, education and outreach work as specified in their existing agreements unless the government agency has explicitly instructed otherwise.  Please continue preparing and submitting proposals according to agency deadlines as most proposals continue to be accepted by agencies.  If a stop work order is received, please forward to [email protected] for OSRAA to work with the agency on compliance with the order.  General instructions from agencies (e.g. NSF email to PI's on 1/28) to stop certain activities (e.g. Implementations of the Executive Order prohibiting DEI activities) are expected to be followed with agency guidance specific to each project.  It is not clear at this time how these instructions will impact each project until the agency provides instructions on changing scopes of work and rebudgeting procedures.  

The university is actively assessing a recent memo from the Office of Management and Budget to all agencies to temporarily pause new grant activity. Agencies are required to review funded projects and funding opportunities. It is our understanding that a late-breaking court order provides a reprieve to Feb. 3, 2025, from the OMB temporary pause on these programs and then a longer-term court decision is expected. If enacted the temporary pause, which may be subject to legal challenges and congressional action, impacts the issuance of new awards, disbursement of federal funds for open awards and other relevant agency actions that may be related to recent executive orders. In addition to the pause on new grant activity, OMB also directs federal agencies to pause activities associated with open Notice of Funding Opportunities, such as conducting merit review panels. Any programs not connected to the recent executive orders are not subject to this pause. The university will provide additional guidance as we gather more information. Read the OMB memo published by the Washington Post.