NSF moves to enact cap on indirect costs

 

The US National Science Foundation (NSF) has announced that it will cap the reimbursement of facility and administrative (F&A) costs—also known as indirect costs—at 15% for all new grants, effective today.

The NSF says in a policy notice that the new rule allows the agency and its awardees “to focus more on scientific progress and less on administrative overhead.” Michael England, an NSF spokesperson, tells C&EN in an email that the policy will not be applied retroactively.

These are not the first funding cuts from the NSF. In recent months the agency has also halved the number of graduate fellowships and terminated over 1,000 active grants. It has also paused funding for new grants.

An indirect cost rate of 15% is far lower than the federally negotiated rates that most institutions rely on to pay for laboratory utilities, facility maintenance, administrative services, and other expenses required to support research. The Massachusetts Institute of Technology, for example, has an indirect cost rate of 59%.

That doesn’t mean that 59% of NSF grants awarded to MIT scientists go toward the university’s indirect costs. Rather, the rate is part of a bigger calculation that’s used to determine how much additional money—on top of what is needed for the direct cost of research—should be provided to the school as reimbursement.

Barbara R. Snyder, the president of the Association of American Universities (AAU), says in a statement on the AAU website that lowering the indirect cost reimbursement rate will lead to “fewer scientific innovations and breakthroughs for the American people.” It will also impact the country’s ability to train the next generation of the scientific workforce, the statement continues.

In an emailed statement to C&EN, Matt Owens, president of COGR (an association of research institutions), agrees that the new NSF policy is “a disaster in the making for American science & technology and our nation’s continuing competitiveness.”

But Owens points out that federal courts intervened on two other attempts to cut indirect cost rates. After temporarily stopping the National Institutes of Health from capping its rate to 15% in February, a Massachusetts judge last month issued a permanent injunction against the move. Another judge has temporarily blocked the US Department of Energy from imposing the same cap.

A coalition of national organizations representing universities and research institutions has begun an effort to develop a new funding model for indirect costs. In a press release, the group, which includes COGR and the AAU, says it “seeks to identify and reduce or eliminate regulatory barriers, produce a simple and easily explained model, and increase transparency.”