Dear Colleagues,

We are sharing the following updates regarding federally funded projects and related administrative issues. Your review of the guidance below is appreciated. Thank you also for your continued efforts conducting and/or supporting research at MSU.

National Science Foundation (NSF) and Indirect Costs (also known as Facilities and Administrative (F&A) Costs)

It was recently reported that NSF has been holding new awards. NSF issued a notice that universities would need to accept on a prospective basis a 15% cap on indirect costs.Following legal action challenging this directive by higher education associations to which MSU belongs, the court set a Preliminary Injunction date, thenNSF informed the court that it will stay implementation of its Notice on the 15% indirect Cost Rate for the interim. It is expected that the next action will be motions for summary judgment which will be heard on June 13.

Proposals should continue to include MSU’s negotiated F&A rate. OSP is not authorized to accept awards below the approved rate, and no rebudgeting to reduce F&A costs will be approved. UpdatedFrequently Asked Questions acknowledge the pause in implementation: Updates on NSF Priorities and FAQs.

Update on Other Agencies and Indirect Costs

Three other agencies currently have issued some form of communication on reducing F&A reimbursement. The most recent is the Department of Defense and it was done via a notice to DOD leadership to formally publish a change to reimbursement.

Earlier implementations from NIH and Department of Energy are still on hold for action in the courts.

As described above, proposals should continue to include the negotiated F&A rate. OSP is not authorized to accept awards below the approved rate, and no rebudgeting to reduce F&A costs will be approved.

Updated NIH Processes for No-Cost Extensions (NCE link disabled)

Regrettably, we have learned that the automatic NCE link in eRA Commons is no longer available. NIH issued the following notice:

NOT-OD-25-110: Updated NIH Processes for No-Cost Extensions:

This notice alerts the extramural community that NIH has temporarily disabled the No-Cost Extension functionality in eRA Commons.The Director of NIH has directed NIH staff to review all existing grants and cooperative agreements to ensure that NIH awards do not fund off-mission activities or projects. Therefore, temporarily disabling the NCE functionality in eRA Commons will allow NIH staff to review and assess all NCE requests to confirm that the activities proposed during the extension align with the NIH mission and agency priorities.

At this time, all requests for NCEs must be submitted as a prior approval request in eRA Commons, for NIH review and approval. Requests for activities that do not align with the NIH mission and agency priorities will not be approved.

Updated NIH Policy on Foreign Subawards

NIH’s policy on non-U.S. subawards has changed. NIH is establishing a new award structure that will prohibit foreign subawards from being nested under the parent grant. Until this policy is in place, NIH will not issue awards to domestic or foreign entities that include a subaward to a foreign entity. Applicants are advised not to use non-U.S. subawards through the following notice:

NOT-OD-25-104: Updated NIH Policy on Foreign Subawards

NIH anticipates that no later than September 30th, 2025, it will implement a new award structure in which foreign collaborators will receive their own, separate awards directly from NIH. These awards will be formally linked to the main project but managed and tracked independently.

The policy applies only to subawards. It does not affect collaborations with foreign consultants or purchases of unique goods or services from international vendors.

Resources and Reminders

We encourage you to review the Federal Updates Resulting from Administration Transition resource for guidance and support during this time.

Feel free to share this email with MSU colleagues who may benefit from this information. Thank you.

Listserv Information Reminder:

This listserv shares important updates, including revised policies, training opportunities, sponsor announcements, and technology/system changes.  It also distributes the SPA Newsletter and Kuali Research Updates.

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Twila Fisher Reighley
Assoc. VP for research
Sponsored Programs Administration
Michigan State University reighley@msu.edu