NJIT Implementation of Recent Executive Orders
Update on Federal Research Grants and Contracts
Information regarding recent executive orders and their impact to the NJIT research community.
RE: Supplemental Guidance to the 2024 NIH Grants Policy
Statement: Indirect Cost Rates
Dear Colleagues,
On Friday, February 7, 2025, the National Institutes of Health (NIH) issued a notification pertaining to indirect cost rates on current and future NIH grants. Indirect cost rates are reimbursements for related but indirect costs for facilities and administration necessary to support the funded research activity. Per the notification, award recipients for any new grant issued, and for all existing grants to Institutions of Higher Education (IHEs), are capped at a 15% indirect cost rate. NJIT’s current negotiated rate with the federal government is 50.5%.
Yesterday, attorneys general representing 22 states, including New Jersey, filed a lawsuit against the NIH and others, requesting a temporary restraining order to prevent implementation of this change. The judge in that case granted a temporary restraining order. Therefore, NJIT will continue submitting proposals with the federally approved rate of 50.5% at this time. The temporary restraining order is set to remain in effect until a hearing scheduled for February 21, 2025. NJIT leadership continues to work with contacts at federal and state agencies to monitor this situation and will communicate any developments as rapidly as possible.
The faculty, staff, and students of NJIT have long used federal funding to conduct groundbreaking and vital research that positively impacts our state, our nation, and our world, and the university both appreciates and values your commitment to our public research mission as we continue to navigate this rapidly evolving situation.
Please visit our website periodically for updates on this situation.
Sincerely,
Atam Dhawan
Senior Vice Provost for Research
NJIT Response and Guidelines on Implementation of Federal Executive Orders on Federally Funded Research Grants and Contracts
- Update on Federal Research Grants and Contracts (02/11/2025)
- Update: Executive Orders and Federally Funded Research (02/04/2025)
- Executive Orders and Federally Funded Research (01/30/2025)
Federal Executive Orders and OMB Memos
- Recent Federal Executive Orders
- A White House Clarification Memo
- OMB Memorandum on Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs
- OMB Memorandum M-25-13: Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs
- OMB Memorandum M-25-14: OMB Memorandum M-25-13 is rescinded
Agency Specific Notifications Regarding Executive Orders
- NSF Implementation of Recent Executive Orders
- Department of Education: Guidance Related to Temporary Pause of Federal Financial Assistance Programs
Education association statements in response to EOs
- AAU statement (Association of American Universities)
- ACE statement (American Council on Education)
- APLU statement (Association of Public & Land-Grant Universities)
Frequently Asked Questions
First, it is important to know that the majority of awards at NJIT follow this funding mechanism. This type of funding mechanism means the research institution is reimbursed for the actual costs they incur while carrying out the research project. The institution tracks and documents all eligible expenses, then submits them to the sponsor for reimbursement.
Direct costs are those that can be easily and directly associated with a specific project or activity. They can be specifically identified with a particular project or activity and are budgeted for specific line items within the project budget. Indirect costs, often known as facilities and administration (F&A), are those that benefit multiple projects or activities and are difficult to directly assign to a specific project. They are calculated as a percentage of direct costs and may be limited by the granting agency.
Examples: salaries of project staff, materials and supplies used for the project, travel expenses directly related to the project. More details about charging direct costs may be found here.
Examples: administrative salaries, utilities (heating, water, air), safety, office supplies, etc. Borrowing an example from UW Madison: These so-called “indirect costs” aren’t optional expenses. They are both substantial and an absolutely fundamental part of innovative science. As is the case while running your household, you need both money to buy groceries (direct) and the financial resources to keep a working refrigerator and electricity (indirect) to store your milk and eggs.
A fringe rate is a percentage that represents the cost of employee benefits in addition to their base salary or wages. These benefits, often called fringe benefits, can include things like health insurance, retirement contributions, paid time off, and other perks. Fringe is a distinct category and not included in indirect costs.
The most recently negotiated federal rates are posted here. However, on February 7th 2025, the NIH issued supplemental guidance, specifically "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 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. The NIH notice NOT-OD-25-068 is posted here. Currently, there are three separate lawsuits filed against the NIH and others concerning the rate cut. At present, there are temporary restraining orders in effect in two of the lawsuits that prevent, in the short term, the rate cut from going into effect. This means it cannot go into effect until a further order from the court is made.
The Indirect Cost Return (ICR) provides funding to PI's, departments, colleges, and centers based on collected F&A charges. Generally speaking approximately 15% of the F&A received by NJIT each year from eligible externally funded grants, is equitably distributed between PI's, departments, colleges and/or centers. This provides funds for the purchase and maintenance of equipment, travel, and other research expenses including a potential source of required cost-sharing of future proposals. More details are posted here.