Update Related to Federal Agency Grant Developments – February 11, 2025
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To the NAU Research Community,
A Federal action and judicial reaction have occurred concerning Indirect Cost Rates (IDC) on NIH sponsored projects at NAU. A fixed 15% indirect cost rate was proposed, effective February 10th. However late yesterday, a Federal judge blocked this action with a Temporary Restraining Order. For now, until further notice, NAU will continue to utilize our Federally negotiated indirect cost recovery rates for both sponsored proposals and approved awards to NAU.
What does this mean for you and your NIH sponsored grants and contracts?
With today’s court order in place:
- all outgoing NIH sponsored project proposals and contracts will follow existing NAU protocols for applying IDC, including applying our federally approved indirect cost recovery rates unless otherwise stipulated, until further notice.
- all OSP-managed NIH sponsored project awards, will continue to utilize their approved IDC per the award / project agreement, until further notice.
Background:
Last Friday (February 7th) the National Institutes of Health (NIH) released supplemental guidance to the NIH Grants Policy Statement (NOT-OD-25-068) imposing a standard facilities & administrative (F&A) costs (also known as indirect costs) rate of 15% for all NIH grantee institutions, including NAU. This 15% rate would replace individually negotiated rates for an institution and apply to both existing grants and future grants starting February 10, 2025. Additional details of the NIH guidance can be found in the Science.Org article “NIH slashes overhead payments for research, sparking outrage and lawsuit“.
In response to these NIH actions, earlier yesterday (February 10th) 22 State’s Attorney Generals (including Arizona) filed a lawsuit for Declaratory and Injunctive Relief (Case 1:25-cv-10338).
Late yesterday, in response to the lawsuit filed by 22 states (including Arizona), a federal judge blocked NIH from imposing a new indirect costs (Case 1:25-cv-10338-AK ) payment rate of 15% on all new and existing grants. The judge has scheduled a 21 February hearing on the issue.
The OSP at NAU continues to monitor the activities of the new federal administration, in close collaboration with our fellow ABOR institutions. Please review the OSP Federal Administration Updates webpage frequently or contact us at nau-osp@nau.edu. You can also reach Tom Champagne, Associate Vice President of Research, 24 hours/7 days a week.
Thank you!
Tom Champagne