A landmark federal court decision has halted the National Science Foundation’s (NSF) policy to cap indirect research cost reimbursements at 15% for universities, safeguarding billions in critical research funding. The NSF’s policy, announced in May, would have replaced individually negotiated rates—often between 50% and 65%—with a flat 15% cap, severely limiting universities’ ability to recover the true costs of supporting federally funded research.
Key Takeaways for Best Practices:
•Transparent and Individualized Cost Negotiations: The ruling underscores the importance of individualized negotiations for indirect cost rates, recognizing that universities have diverse research infrastructures and needs. A one-size-fits-all cap fails to account for these differences and can disproportionately harm institutions with higher research activity.
•Legal and Regulatory Compliance: Any changes to federal funding policies must align with existing laws and regulations. Judge Talwani found the NSF’s policy lacked legal authorization and failed to provide a rational basis for its implementation, highlighting the need for agencies to justify policy shifts with clear evidence and statutory support.
•Sustaining Research Capacity: The decision highlights the critical role of indirect cost recovery in sustaining research capacity, including maintaining facilities, technology, and research personnel. Best practices include ensuring funding structures that allow universities to support both direct and indirect costs of research, thereby preserving the nation’s innovation ecosystem
Full story: US judge blocks slashing of universities’ federal funding from National Science Foundation | Reuters
