Dear Colleagues,
On Friday, the National Institutes of Health (NIH) announced an indirect cost rate cap of 15% for new and existing grants. The new rate, which is proposed to go into effect Feb. 10, replaces previously negotiated rates with universities and research institutions. U-M’s current negotiated rate with the federal government is 56%.
“Indirect costs” – also known as facilities and administration (F&A) costs – support expenses that are essential to a university’s ability to conduct federally funded research. These expenses support the development and maintenance of our laboratories and research facilities; information technology and internet services; and administrative support to protect human health and safety for compliance with mandatory regulations. This change would result in a significant decrease in the amount that U-M receives from the federal government to conduct vital research.
There is a great deal of uncertainty over whether and how this policy will be implemented. This uncertainty is heightened by the emergence of potential lawsuits and congressional actions. OVPR, with the support of U-M’s Office of Government Relations and the Office of General Counsel, is working hard to learn as much as we can about these developments.
OVPR is also working with our contacts at federal agencies to learn about implications for specific grants. Federal agency program officers have the authority, and the responsibility, to clarify whether a new federal directive applies to a grant. If a PI has not heard directly from either the agency that sponsors their work or the officer that oversees the funding program, and there is uncertainty about what directives apply, the program officer should be contacted.
Our university leaders are working diligently to understand how best to support our mission-driven research and the talented people across our institution who drive this work. There is a lot of communication with, and learning from, key stakeholders in government, the private sector, other universities, and other communities.
With its incredible faculty, staff, and students, the University of Michigan has used federal research funding to conduct vital research that saves lives, creates jobs, enhances national security, and improves quality of life for people in every part of our state and across the nation. Thank you for your continued resilience and steadfast commitment to our public research mission as we navigate this period of change.
Please continue to visit the OVPR website for updates on research agency directives and the Public Affairs website for broader information on federal actions. We also welcome your feedback, insight, and questions at [email protected].
Sincerely,
Skip
Arthur Lupia
Vice President for Research and Innovation (interim)
Gerald R. Ford Distinguished University Professor