Important Update on DOE Indirect Cost Policy Changes
Date: April 16, 2025
Dear colleagues,
I write to share important developments regarding the Department of Energy (DOE) and its handling of indirect research costs, also known as facilities and administrative (F&A) costs.
On April 11, the DOE announced a proposed policy that would cap indirect cost recovery at 15% for new DOE research grants to the University — a substantial reduction from Northwestern’s current negotiated rate of approximately 60%. If implemented, this change would have implications for our ability to sustain federally funded research, affecting not only Northwestern but academic research institutions nationwide.
The University has since received formal notification from the DOE indicating that existing DOE awards will be terminated unless Northwestern agrees to adopt the new 15% rate by May 14, 2025. Peer institutions have received similar communications.
On Tuesday, a coalition of research universities and national advocacy organizations filed a complaint challenging the new DOE rate cap policy and related grant terminations. And today, a U.S. District Court Judge in Massachusetts issued a temporary restraining order temporarily blocking implementation of the new policy, including by prohibiting DOE from terminating any grants as part of the policy. Earlier this year, a similar lawsuit resulted in an injunction that blocked the National Institutes of Health (NIH) from enacting a comparable 15% cap.
Senior leadership, in collaboration with the school deans, is closely monitoring the situation, working with peer institutions, the Association of American Universities, federal policy experts and government leaders to assess the situation fully, respond strategically, and keep our research programs strong. We will share additional updates as the situation evolves and as we further define our response.
For now, PIs should continue to prepare budgets for DOE grants with the University’s currently negotiated (full) F&A rate, working with their research administrators who can facilitate this process and provide real-time updates on guidance if there are changes.
Faculty with questions about any active DOE-funded grants or pending proposals should contact the Sponsored Research team, copying Assistant Vice President Cathy Barrera. You can also find updates and resources on our federal policy tracking page.
Thank you for your continued commitment to research excellence. We appreciate your partnership as we confront this challenge and advocate for the sustained strength of our research.
Sincerely,
Eric J. Perreault
Vice President for Research