Dear Carolina research community,
Late Friday afternoon the National Institutes of Health (NIH) published a new notice entitled “Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Costs.” This notice states that effective immediately, all NIH grants must have a maximum indirect cost rate of 15% in lieu of the normal rates defined in a university’s negotiated indirect cost rate agreement.
Clearly this change in policy would have a significant and negative impact on all universities’ ability to support critical research infrastructure. Shortly after learning of this new notice, we began to correspond with our partner associations and have already planned discussions with our congressional delegations for early next week.
While we cannot say for sure, it is likely that this new NIH notice will be challenged in court, and it is possible that we could see a judge issue a temporary restraining order that would pause implementation of this new notice. The Association of American Medical Colleges released guidance that highlighted federal legislation enacted in 2017 that prevents changes to the current facilities & administrative costs (F&A) rate construct, specifically preventing any deviation from negotiated rate agreements or the process by which F&A rates are negotiated. AAMC’s website provides a wealthy of resources on this topic.
Principal Investigators (PIs) do not need to take any action on their projects as a result of this notice. The Office of Sponsored Programs will adjust F&A rates if it ultimately becomes necessary.
Again, a change of this nature would yield significant negative impacts to Carolina — and all NIH grant-funded organizations — as F&A supports the federally required regulatory and compliance functions, the costs to administer grants, and costs of the facilities and infrastructure required to support research. We have been working tirelessly to provide our partners with information on F&A, how it is used, and how essential it is to support the research infrastructure here and across the country.
We also continue to work hard to provide consultation to faculty related to the many executive orders issued over the past two weeks. We will keep you posted on any new developments as we learn of them. Meanwhile, thank you for all that you do to support Carolina, our state, and our country. We will get through this together!
Penny Gordon-Larsen
Vice Chancellor for Research
Andy Johns
Senior Associate Vice Chancellor for Research
Kelly Dockham
Director, Office of Federal Affairs