For the past several months, federal agencies have been issuing changes to indirect cost rates, also known as facilities and administration (F&A). States, universities and professional associations have filed lawsuits in response to these changes.

As of May 20, 2025, the CALS Research Division has summarized these changes, and the implications for UW researchers submitting new proposals:

• NSF: In a lawsuit brought by AAU and others, the National Science Foundation has agreed to stay implementation of its 15% F&A cap policy until at least the summary judgment hearing scheduled for June 13.  What this means: We expect new awards to be issued at our negotiated F&A rate. However, they may include a clause reserving NSF’s right to apply the 15% cap as of the date of the award if the case is dismissed or the government prevails.
• DOE: A federal court has granted a preliminary injunction prohibiting the Department of Energy from enforcing its 15% indirect cost cap for institutions of higher education, pending further court order. What this means: New DOE awards should also be issued at our negotiated F&A rate.
• DOD: We are aware of an internal memo from the Secretary of Defense instructing DOD entities to publish policy guidance by June 4 that would apply a 15% cap on indirect costs for all new awards to IHEs. The memo also directs DOD entities to begin renegotiating existing awards to bring indirect rates under the 15% cap.  Our federal relations team, OLA, and RSP, are closely monitoring the situation.
• NIH: As a reminder, NIH’s proposed 15% F&A cap is under a permanent injunction from a federal court.  What this means: New NIH awards should continue to be issued at our negotiated F&A rate.