April 14, 2025
On April 11, the Department of Energy (DOE) released an announcement detailing actions to limit the Facilities and Administration (F&A) rate for institutes of higher education to a standard rate of 15 percent. This would replace current negotiated rates, which currently average above 30 percent for colleges and universities. The notice indicates that DOE is undertaking actions to ensure that grant awards not currently in line with this updated policy are terminated, and that all future grant awards will default to a 15 percent rate. This update applies to both grants and cooperative agreements. DOE will notify grants recipients of termination by separate correspondence.
The announcement recognizes that DOE’s indirect cost rate for grants for higher education institutions is negotiated by either the Department of Defense’s Office of Naval Research (DOD ONR) or the Department of Health and Human Services (HHS), and that DOE generally must accept this negotiated rate. However, DOE notes that it may deviate from a “class of federal awards” after publicizing the “general decision making criteria” followed when justifying such deviations. While the research community waits for additional details on this policy change to be published, universities and coalitions are working to coordinate a response for advocacy with Congress. The Association for American Universities (AAU), Association of Public & Land-grant Universities (APLU), and American Council on Education (ACE) have issued a joint complaint and legal filing contesting cuts to the F&A rate, available here. Lewis-Burke has confirmed that questions about existing awards should be directed to the grants or contracting officer identified in the award documents. Furthermore, Lewis-Burke anticipates efforts to implement changes to F&A rates at other federal agencies including DOD. More information about the policy change as well as the full announcement will be made available on the DOE Policy Flash pagehere. Additional resources on F&A from COGR can be found here