The U.S. Department of Energy (DOE) today announced it is unilaterally cutting in half the overhead rate on its academic grants, something a federal judge recently told the National Institutes of Health (NIH) it could not do.
“The purpose of [DOE] funding to colleges and universities is to support scientific research – not foot the bill for administrative costs and facility upgrades,” Secretary of Energy Chris Wright said in a policy directive declaring the new rate for indirect cost reimbursement would be 15%.
DOE says it currently pays universities an additional 30 cents for every dollar of direct research it funds, a rate negotiated individually by each institution to pay for supporting DOE-funded research on campus. Wright says the new rate will save DOE $405 million in an annual external research grants budget of $2.5 billion. That total doesn’t include DOE’s support for its 17 national laboratories.
On 7 February, NIH made a nearly identical announcement, saying a shift to a flat 15% rate from an individualized institutional rate would save it $4 billion annually. A coalition of 22 state attorneys general, universities, and biomedical advocacy groups immediately sued, and on 4 April a federal judge issued a permanent injunction against the change, saying the government had ignored federal statutes and a congressional directive banning such a move. The statutes on how indirect costs are determined apply to all federal agencies, but the congressional language only to NIH.
DOE’s action, announced at 5 p.m. today (see policy flash below), is expected to elicit similar criticism from research advocates. “This 15% cap is ill-informed,” says Representative Zoe Lofgren (CA), the top Democrat on the U.S. House of Representatives’s science committee. “It will kneecap research universities’ ability to conduct critical research on behalf of the federal government. This administration seems to be assuming that ‘indirect’ means ‘unnecessary’—that’s just not true.”
DOE’s directive does contain one new—and puzzling—element. It declares it will “terminate all grant awards to [academic institutions] that do not conform with this updated policy,” which is effective immediately. “Recipients subject to termination will receive separate notice and guidance,” it adds.
Science lobbyists say they are baffled by that language. DOE awards the indirect costs along with the research grant, so institutions have no control over how much they receive—and therefore no power to violate the new policy, noted one senior administrator who requested anonymity because they hadn’t had time to fully analyze the policy.
