Office of Research

Dear Colleagues,

In previous updates, we discussed policy statements and guidance issued by the Department of Health and Human Services (DHHS), the National Institutes of Health (NIH), and the Department of Energy that cap indirect cost rates at 15% for institutions of higher education. For now, these rate caps are paused nationwide as litigation continues.

More recently, the National Science Foundation (NSF) issued a similar policy notice capping the indirect cost rate applicable to institutions of higher education at 15%. A lawsuit has also been filed challenging that policy. While this rate cap has not yet been paused, it is possible that it too will be subject to a temporary restraining order later this month.

Other recent actions and news include:

• Agencies continue to review active projects and are terminating those that do not align with new federal government and agency priorities.
• Regarding terminated projects, please note that costs incurred because of termination may be reimbursed if they are otherwise allowable under the award terms and applicable cost principles. See details of allowable termination costs in 2 CFR 200.472. Following the award’s terms and conditions, an itemized accounting of allowable termination costs must be provided within 30 days of the termination date.
• Efforts to significantly restructure NIH, NSF, and other federal agencies are disrupting project review and funding.
• NIH has temporarily disabled the automatic No-Cost Extension (NCE) feature in eRA Commons to review all existing projects and ensure they align with NIH’s mission and priorities. During this period, all NCE requests must be submitted as prior approval requests for NIH review. Extensions for activities not aligning with NIH’s mission will not be approved. NOT-OD-25-110
• NIH will no longer issue foreign subawards. Instead, foreign subawards must be structured as subprojects directly linked to the prime award, rather than nested under the parent project as a subaward. NIH will unveil a new process to enable this structure in September 2025. This policy change, outlined in NOT-OD-25-104, aims to enhance oversight, ensure consistency in reporting, and strengthen national security. NIH is clear that proposals including foreign subawards will not be awarded. If domestic partners can perform the work, proposals should include domestic subawards. Otherwise, we will delay foreign component proposals until September 2025 for submission under the new system/mechanism.
• The White House proposed a budget for fiscal year 2026 that would cut funding for NIH and NSF by roughly 40% and 55%, respectively.

We are continuing to monitor this rapidly evolving situation, maintaining communication with state and federal officials, and working to reduce the impact on our students, staff, faculty, and stakeholders. At this time, about four dozen UGA projects have been terminated from our portfolio of nearly 2,700 active sponsored projects.

Two items have been initiated in response to these terminations and other changes in federal funding:

• The Office of Research has launched the Pivot Fund Program to provide limited short-term support, primarily for payroll, to graduate students, postdoctoral researchers, faculty, and other research staff affected by the loss of federal funding after project termination or non-renewal. Applications submitted by PIs with unit endorsement require documentation of the impacted project and will be reviewed by a committee. Full details and the application link are available on the Internal Grants & Awards page. Questions can be directed to ovpr-fundreq@uga.edu.
• The Office of Research is working to assess the viability of institutional appeal requests and to submit documentation seeking the reinstatement of projects that have a strong case. PIs with recently terminated projects will be contacted directly by Sponsored Projects Administration with more information.

Thank you for your continued perseverance, commitment, and resilience as we navigate these challenges together. We are dedicated to keeping you informed as new information emerges and to providing the necessary support. For questions about your sponsored projects, don’t hesitate to contact Jill Tincher or Cathy Cuppett in SPA at sponprog@uga.edu. For general inquiries, contact vpr@uga.edu.

Sincerely,

Christopher King, DVM, DACLAM
Interim Vice President
Office of Research | University of Georgia