Grants paid by the federal government have two components. One covers the direct costs of performing the research, paying for salaries, equipment, and consumbles like chemicals or enzymes. But the government also pays what are called indirect costs. These go to the universities and research institutes, covers of providing and mainTaining the lab space, heat and electricity, administer and hr functions, and more.
These indirect costs are negotiated with each research institute and average close to 30 percent of the Amount Awarded for the research. Some institutions see indirect rates as high as half the value of the grant.
On Friday, The National Institutes of Health (NIH) Announced that Negotiate Rates were ending. Every existing grant, and all there funded in the future, will see the indirect cost rate to just 15 percent. With no warning and no time to adjust to the change in policy, this will prove catastrophic for the budget of near Nearly Godical Research Institution.
Cut in Half or More
The new policy is described in a supplemental guidance document that modifies the 2024 grant policy statement. The document cits federal regulations that allows a different indirect cost rate from that negotiated with research institutions for “eite a class of federal awards or a single federal award Decision. So, much of the document describes the indirect costs paid by charitable fourth
The new rate of indirect cost reimbursment will be applied to any newly funded grants and retroactivly to all existing grants starting with the issue of this notice. The retroactive nature of this decision may end up being challenged due to the regulations cited earlier, which also state Direct cost rate. ” However, even going forward, this will likely severely curtail biomedical research in the us.
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