Update: Executive Orders and Federally Funded Research

Dear Colleagues,

NJIT received a notice from the Department of Energy titled, Adjusting Department of Energy Grant Policy for Institutions of Higher Education (IHE), dated Friday, April 11, 2025. The notice is posted here.

This notice informs that the Department of Energy, pursuant to 5 U.S.C. 553(a)(2), is updating its policy with respect to Department grants awarded to Institutions of Higher Education (IHEs). Following are the statements from the DOE memorandum.

At present, the Department’s indirect cost rate for IHE grants is typically negotiated by either “the Department of Health and Human Services (HHS) or the Department of Defense’s Office of Naval Research (DOD), normally depending on which of the two agencies (HHS or DOD) provide[d] more funds to the [relevant] educational institution for the most recent three years.” 2 C.F.R. pt. 200, app. III(C)(11)(a)(1). Though the Department generally must accept this negotiated rate, see 2 C.F.R. 200.414(c)(1), it may deviate therefrom for “a class of Federal awards” after implementing and making publicly available “the policies, procedures and general decision-making criteria” it will follow when seeking and justifying deviations. Id. 200.414(c)(1), (3). A “class of Federal awards” is defined to include “a group of Federal awards . . . to a specific type of recipient or group of recipients,” such as grants to IHEs—the class relevant to this policy update. Id. 200.1.

For the reasons set forth in this memorandum, hereinafter, the Department will no longer use the negotiated indirect cost rate for grants awarded to IHEs. Instead, it is setting a standardized 15 percent indirect cost rate for all grant awards to IHEs. This is at the high end of the “up to 15 percent” de minimis rate permitted by government-wide regulation. See, e.g., 2 C.F.R. 200.414(f). Consistent with this memorandum, the Department is undertaking action to terminate all grant awards to IHEs that do not conform with this updated policy. See 2 C.F.R. 200.340(a), (b). Recipients subject to termination will receive separate notice and guidance.

All future Department grant awards to IHEs will default to this 15 percent indirect cost rate. This system will better balance the Department’s twin aims of funding meaningful research and upholding its fiduciary duties to the American people.

Additional information can be found on the following DOE website: http://energy.gov/management/listings/policy-flashes

If you receive any notification including a stop order and budget change on indirect costs rate on your award/proposal, or request to sign any attestation from DOE or any other funding agency, please forward the notification with any attachment to me immediately at dhawan@njit.edu and copy Eric Hetherington at erich@njit.edu. 

Please do not sign any document sent to you regarding any attestation on the federal research grants. 

We will continue to carefully review at the institutional level with the provost and general counsel offices to advise and follow up. The Office for Research and the Office of General Counsel will review the request and respond with instructions for you to follow.

Please visit our website periodically for updates on this situation.

Sincerely,

Atam Dhawan
Senior Vice Provost for Research