Indirect Cost Cap
This page catalogs executive orders, federal agency directives, litigation updates and other guidance and information pertaining to the National Institutes of Health (NIH) indirect cost rate cap of 15%.
Latest News
DOE
- Latest News: Temporary Restraining Order Granted
- The Department of Energy (DOE) announced that it will limit financial support of “indirect costs” of DOE research funding to 15%
- On Friday, April 11, 2025, the Department of Energy released a new policy memorandum, entitled Adjusting Department of Energy Grant Policy for Institutions of Higher Education. This policy sets a standardized 15 percent indirect cost rate for grant awards.
- We are monitoring a complaint and a motion for a temporary restraining order that was filed yesterday in the U.S. District Court for Massachusetts. This was filed by the Association of American Universities, Association of Public & Land-grant Universities, and American Council on Education and 9 universities. We will be monitoring these legal challenges to DOE’s action and will update as information becomes available.
NIH
- Latest news: Permanent Injunction Granted in NIH Case
- March 4, 2025 – Preliminary Injunction Ordered. NIH enjoined from enforcing rate change notice. Purdue Post Award will continue to monitor proposal and award activity on a case-by-case basis and review status with Principal Investigators as needed.
- February 13, 2025 – NIH will not implement the Rate Change.
- February 7, 2025 – The NIH released NOT-OD-25-068: Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates which states:
- “For any new grant issued, and for all existing grants to IHEs retroactive to the date of issuance of this Supplemental Guidance, award recipients are subject to a 15 percent indirect cost rate. This rate will allow grant recipients a reasonable and realistic recovery of indirect costs while helping NIH ensure that grant funds are, to the maximum extent possible, spent on furthering its mission. This policy shall be applied to all current grants for go forward expenses from February 10, 2025, forward as well as for all new grants issued. We will not be applying this cap retroactively back to the initial date of issuance of current grants to IHEs, although we believe we would have the authority to do so under 45 CFR 75.414(c).”
We are closely analyzing the newly released notice now. We will keep you apprised of further developments and our implementation strategy.
Litigation Summary
DOE
AAU v. Department of Energy
- April 14, 2025 Complaint alleging that rate cap violates the APA and seeking permanent injunction.
- Apr. 16, 2025, Order granting a TRO that enjoins the government from implementing, instituting, maintaining, or giving effect to the DOE rate cap policy or otherwise modifying negotiating indirect cost rates except as permitted by statute and regulations and from terminating any grants based on the grantee’s refusal to accept an indirect cost rate lower than their negotiated rate.
NIH
Commonwealth of Massachusetts v. National Institutes of Health
- February 10, 2025 – Complaint alleging that 15% rate cap violates APA and seeking TRO.
- February 10, 2025 – Order granting TRO applicable to plaintiff states.
- Court combined this suit with AAU and AAMC suits listed below for argument. Hearing was held February 21, 2025, and court extended TRO until it makes decision re. grant of a preliminary injunction.
- Mar. 5, 2025, Memorandum and Order granting a preliminary injunction that enjoins the defendants from “taking any steps to implement, apply, or enforce the Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect costs Rates (NOT-OD-25-068) in any form with respect to institutions nationwide.
- Apr. 4, 2025, Motion filed by Defendants with the Assent of Plaintiffs to convert the Order on Motion for a Preliminary Injunction into a permanent injunction and enter final judgment with the government retaining the right to appeal from the final order and judgment.
- Apr. 4, 2025, Final Judgment and Permanent Injunction which government may still appeal.
- Apr. 8, 2025, Notice of Appeal to the First Circuit Court of Appeals.
Association of American Universities v. Department of Health & Human Services
- February 10, 2025, Complaint alleging that 15% cap violates APA. [NOTE: Court did not grant TRO in this case because one was in place in AAMC case listed below. Court combined AAU, AAMC and Commonwealth of Mass. cases for argument on February 21, 2025].
- Hearing was held February 21, 2025, and court extended TRO until it makes decision re. grant of a preliminary injunction.
- See Mar. 5, 2025, Memorandum and Order granting a preliminary injunction that enjoins the defendants from “taking any steps to implement, apply, or enforce the Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect costs Rates (NOT-OD-25-068) in any form with respect to institutions nationwide.
- Apr. 4, 2025, Motion filed by Defendants with the Assent of Plaintiffs to convert the Order on Motion for a Preliminary Injunction into a permanent injunction and enter final judgment with the government retaining the right to appeal from the final order and judgment.
- Apr. 4, 2025 Final Judgment and Permanent Injunction, which government may still appeal.
- April 8, 2025 Notice of Appeal.
Association of American Medical Colleges v. National Institutes of Health
- February 10, 2025, Complaint alleging 15% cap violates APA, exceeds NIH statutory authority, violates due process and statutory and constitutional prohibitions on retroactivity.
- February 10, 2025, Order granting nationwide TRO.
- Court combined this suit with Commonwealth of Mass. and AAU suits listed above for argument. Hearing was held February 21, 2025, and court extended TRO until it makes decision re. grant of a preliminary injunction.
- See Mar. 5, 2025, Memorandum and Order granting a preliminary injunction that enjoins the defendants from “taking any steps to implement, apply, or enforce the Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect costs Rates (NOT-OD-25-068) in any form with respect to institutions nationwide.
- See Apr. 4, 2025, Motion filed by Defendants with the Assent of Plaintiffs to convert the Order on Motion for a Preliminary Injunction into a permanent injunction and enter final judgment with the government retaining the right to appeal from the final order and judgment.
- See Apr. 4, 2025 Final Judgment and Permanent Injunction, which government may still appeal.
- See Apr. 8, 2025 Notice of Appeal.
- Case on Appeal