This message was sent to faculty and academic personnel across the University of Washington
Dear colleagues,
On Friday, May 2, the National Science Foundation released a new policy that, as of Monday, May 5, applies a standard indirect cost rate not to exceed 15% to all grants and cooperative agreements awarded to higher education institutions, including the University of Washington.
Funding opportunities issued after May 5 will include notices of this cap on the reimbursement for indirect research costs. This policy does not apply retroactively to existing awards, so there is no change in rates for remaining funding on an existing grant, continuing grant increments and supplements to those awards when effectuated by amendments.
We are seeking legal guidance as to whether the negotiated rates should apply to new proposals or awards that are based on a funding opportunity that did not have this restriction. And a lawsuit challenging this policy has already been filed by the Association of American Universities, the Association of Public and Land-grant Universities, and the American Council on Education.
Due to the uncertainty posed by this policy and the fact that the 15% rate does not provide sufficient funds for UW to meet its obligations to support the research proposed, the UW Office of Sponsored Programs will pause processing of NSF awards with notification dates on or after May 5. OSP will delay submission of new proposals where there is no immediate deadline. These pauses will remain in effect until we have clarity on the legality of this unilateral change to our negotiated indirect cost rates.
NSF awards with notice dates before May 5 that have not yet been set up will be set up with the federally negotiated rate. All NSF proposals pending submission in OSP were submitted by May 3 with the negotiated rates.
As we have said in other communications, the negotiated indirect cost rate reflects the true cost of conducting research as determined through federal government auditing. And in many ways, it is actually less than the true cost, because administrative expenses – including to oversee compliance with various federal regulations – are capped. I know that these pauses are not ideal and will have real impacts on research and researchers; however, the UW simply cannot meet its obligations to support federally funded research projects if the NSF rate is capped at this level, which is also the case for attempts by the National Institutes of Health and Department of Energy to impose similar caps.
I or the Office of Research will communicate updates about this situation, including the pause on award processing, as we have more information.
We are part of a national group working on a simpler format for reimbursement of indirect costs of research, which we hope will provide a fair and effective method that the administration and Congress will support. In the meantime, we will continue to coordinate with our national partners and the Washington Attorney General’s Office to come to a resolution that enables universities to continue to conduct the research that has made America healthier, safer and more prosperous over these past many decades.