Issue: ORN-2026-22

NSF and DARPA release new report and RFI to align government, academia and industry around forward-looking AI research

The new AI Forge initiative aims to accelerate AI breakthroughs for national security

The U.S. National Science Foundation (NSF) and the Defense Advanced Research Projects Agency (DARPA) announced AI Forge, a joint research and development program designed to catalyze breakthroughs in AI for national security, working in close collaboration with the Center for AI Standards and Innovation (CAISI) at the National Institute of Standards and Technology. AI Forge aims to accelerate progress toward AI that is significantly more reliable and predictable in high-stakes settings, understandable to its operators, and secure in contested environments. It also envisions building a durable research ecosystem around priority AI challenges and enabling a more robust exchange of talent and ideas across universities, frontier AI companies, and government than is possible today. AI Forge is strategically aligned with America’s AI Action Plan.

Commercial AI development is progressing at a breathtaking pace. Yet many of the most consequential AI challenges for national security remain underexplored because they lack immediate commercial applications and are not the primary focus of private industry. There is a critical need to bridge the gap between commercial AI innovation and the unique requirements of national security. The program convened representatives from frontier AI companies, chief AI officers from more than 15 Department of War (DOW) and Intelligence Community (IC) agencies, and government stakeholders to explore and reach consensus around core AI challenges for national security. The resulting AI Forge Critical AI Challenges for National Security report will serve as a roadmap to focus research under the program.

The report synthesizes insights from experts across industry and government into 15 research challenges spanning three thrust areas. University-led teams will develop aligned ideas and research proposals aligned with these priorities. The thrust areas are:

• AI interpretability: Research challenges focused on making the behavior, decisions and impacts of AI systems understandable to humans, with an objective to move beyond explanations in routine settings toward operational interpretability.
• AI control: Research challenges focused on pioneering tools that can provide strong, verifiable evidence of bounded, auditable and reliable model behavior today, while laying the essential groundwork for maintaining meaningful human control over future, more capable AI systems.
• Adversarial robustness: Research challenges focused on building the scientific foundations for AI that is not just capable, but resilient by design so that it maintains its integrity and intended performance even when under deliberate attack from a thinking adversary.

The program hypothesizes that pre-competitive AI research in these thrust areas can accelerate the adoption of AI innovations by industry and federal agencies. To reflect the fast-changing landscape of technical AI research, the challenges will be revisited every six months during the program.

A call for bold thinking

AI Forge is calling upon the university research community to share their capabilities to conduct research on the challenges described in the program’s Critical AI Challenges for National Security report. University researchers interested in submitting their capabilities are encouraged to do so through the AI Forge Request for Information. Responses to this RFI will be used by the program stakeholders to establish a repository of U.S. universities interested in accelerating next-generation AI research to solve national security challenges. Responses are due by June 22.

_________________________________

OMB Proposes Significant Changes to Competitive Federal Grants Government-wide

Regulation for Federal Financial Assistance

On May 29, the Office of Management and Budget (OMB) issued a proposed rule to revise government-wide requirements for federal financial assistance, including grants and cooperative agreements.  OMB describes the proposed rule as intended to “improve transparency, accountability, and oversight” for federal awards, clarify the regulatory status of 2 CFR, and reduce recipient burden.  If adopted, the proposed rule would make significant changes to the way that federal grants are evaluated, awarded, and managed. 

From Guidance to Regulation

One of the major structural changes is OMB’s proposal to refer to the “Uniform Guidance” as the “Uniform Grants Regulation” while retaining its formal title, “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.” The stated purpose is to provide clearer notice of when OMB’s requirements take effect and how they apply across federal awards. This means that future changes to 2 CFR may apply government-wide on the effective date established by OMB, rather than through separate agency-by-agency rulemaking processes. This could make federal grants management more uniform across agencies, but it also means organizations will need to track OMB-level changes closely because they may apply broadly across federal award portfolios.

Changes to Notices of Funding Opportunities

OMB proposes several changes to notices of funding opportunities (NOFOs). OMB proposes that applicants use Grants.gov unless a program-specific exception is authorized by statute or approved by the federal agency head or designee.

The proposed rule also encourages agencies to use Statements of Interest when high application volume or lengthy proposals are expected. OMB frames this as a way to reduce the burden on applicants that might otherwise prepare lengthy proposals with limited likelihood of selection.

In addition, OMB proposes to make the current best practice that NOFO executive summaries do not exceed 500 words into a requirement, while allowing agency-approved exceptions. This could change the way some opportunities are structured. More programs may include preliminary concept steps or Statements of Interest, and NOFOs may be expected to provide clearer, shorter summaries. However, these are proposed government-wide standards and would still be implemented through individual agency funding opportunities.

Award and Merit Review Process

OMB also proposes changes to merit review. Under the proposed requirements, agencies would ensure that proposals selected for funding are consistent with applicable law, federal agency priorities, and the national interest. The proposal states that senior appointees must conduct certain pre-issuance reviews. Peer review would remain advisory and inform funding decisions, but OMB emphasizes that agencies retain discretion in final award determinations.

OMB proposes to revise program planning and design requirements so that federal program goals and objectives “aim to achieve meaningful results,” are consistent with the public purpose of the authorizing legislation, and are aligned with administration policies and priorities. For research institutions, OMB proposes a government-wide policy addressing eligibility and the use of international elements in federal research and development awards. OMB states that this is intended to strengthen alignment between federal research and development (R&D) funding and national priorities, while preserving flexibility for international engagement that demonstrably advances U.S. interests. The proposed rule also would require agencies issuing federal financial assistance for scientific research to categorize awards as basic research, applied research, or experimental development, consistent with OMB Circular A-11, and to communicate that categorization in the award terms and conditions. The proposal does not ban all international collaboration, but it would create more explicit government-wide expectations around foreign elements in R&D awards and their relationship to U.S. interests.

Foreign Collaboration

OMB proposes a new section, 2 CFR 200.220, addressing the use of federal funds for certain foreign collaborations. The proposed rule would prohibit recipients and subrecipients from using federal funds to support bilateral or multilateral collaborations, agreements, programs, or activities with covered foreign countries or covered foreign entities, unless expressly authorized by statute or approved by the agency under the proposed exception process. OMB states that this prohibition would apply regardless of whether federal funds are used for direct programmatic activities, research, technical assistance, travel, or indirect costs allocable to such collaborations. The proposal also states that it would not prohibit recipients from engaging in foreign collaborations using non-federal funds.

Diversity, Equity, and Inclusion (DEI)

OMB proposes several changes to statutory and national policy requirements under 2 CFR 200.300 and related provisions. The proposed language would require, to the maximum extent permitted by law, that federal awards not be used to fund, promote, encourage, subsidize, or facilitate DEI or DEIA policies, principles, or practices that violate applicable federal anti-discrimination laws. OMB describes this as including racial preferences or other forms of racial discrimination that violate applicable federal anti-discrimination laws, including activities where race or intentional proxies for race are used as a selection criterion for employment or program participation.

OMB also proposes provisions related to “gender ideology,” the “transition” of a child under 19 years of age from one sex to another, and theories of disparate-impact liability. These provisions are framed by OMB as limitations on the use of federal award funds and as clarifications of federal nondiscrimination requirements.

Subawards

The proposed rule emphasizes subaward transparency and reporting. OMB proposes to require recipients to confirm in performance reports that all subawards issued during the reporting period have been reported to SAM.gov. OMB also proposes to clarify that pass-through entities must make subrecipient and contractor determinations for downstream entities, including affiliates, subsidiaries, and related organizations.

OMB also proposes to eliminate fixed amount awards and fixed amount subawards unless otherwise authorized by statute. OMB states that fixed amount awards can limit transparency and hinder effective oversight. This could affect programs that currently use fixed amount subawards or milestone-based structures, although OMB states that the proposed change is not intended to affect existing fixed amount awards or subawards issued before the effective date of the rule.

Termination and Suspension

OMB proposes to revise 2 CFR 200.340 to clarify termination and suspension authorities for federal awards. The proposal would require agencies, with limited exceptions, to include termination provisions in awards, including termination when the agency determines that the award no longer effectuates program goals, federal agency priorities, or the national interest as they exist at the time of termination. OMB also proposes provisions related to temporary suspension, including written stop-work orders.

Indirect Costs

OMB states in the proposed rule that it does not propose updates to the indirect cost rate negotiation system through this document and that it may consider issuing a future request for information on indirect costs. The immediate takeaway is that the proposed rule discusses concerns about the current indirect cost system, including complexity, administrative burden, transparency, oversight, and accountability, but does not itself propose a new negotiated indirect cost rate structure. Indirect costs remain an active area of federal interest and could be addressed through a separate future process.

WSW Partner and Grants Director Laura Lay has evaluated the proposal and compiled a memo explaining the changes being advanced, which could have significant implications for organizations seeking federal funding across the full breadth of the federal government.  Laura’s memo can be accessed at this link.