This was sent to NIH/sub-NIH PIs just now.   Feel free to distribute. 

From: Research <research@utsa.edu>
Date: Monday, February 10, 2025 at 8:27 PM
To: Jill Johnstone King <jill.johnstoneking@utsa.edu>, Lori Schultz <lori.schultz@utsa.edu>, Diana Huffaker <diana.huffaker@utsa.edu>
Subject: NIH Guide Notice on F&A Rates – Impact on Your Grant

Dear Colleagues, 

On Friday, the National Institutes of Health (NIH) released a guide notice announcing a standardized 15% Facilities & Administrative (F&A) cost rate, replacing previously negotiated rates. This change is stated to apply to all current grants for go-forward expenses starting February 10, 2025, as well as all new NIH grants moving forward. 

We understand that this raises concerns about the financial and administrative impact on your projects. Your research is at the heart of our mission, driving discovery, innovation, and impact across disciplines. F&A costs are vital to sustaining a robust research enterprise, supporting essential infrastructure, compliance, and administrative functions that make high-quality research possible. The uncertainty surrounding this change has created significant discussion across the research community, and we want to assure you that we are fully engaged in monitoring the situation. Legal challenges have already been filed, and we anticipate further developments in the coming weeks. 

Although the outcome of these actions remains uncertain at this moment, we are working closely with our peers and external partners to advocate for fair reimbursement. Additional context and background is available on the Federal Research Policy Update page.

Background:

F&A costs, also referred to as indirect costs, are vital to the research enterprise. They cover essential infrastructure and administrative support needed to conduct high-quality, compliant, and safe research. Without adequate F&A reimbursement, universities must absorb these expenses from other funds, potentially limiting the scope and impact of the direct research activities and investment in our research enterprise because of redirecting resources to cover expenses.  

For your awareness, the AAMC provides the following position statement and resources about facilities and administrative (F&A) expenses on the AAMC’s website, including: 

1. About Facilities and Administrative Costs

2. Fact Sheet: Facilities and Administrative Costs of Research

3. Frequently asked questions (FAQ) 

4. A comparison of foundations’ support for F&A to government support 

5. An infographic illustrating what types of expenses are and are not supported by F&A reimbursement. 

Our Ongoing Response

Our leadership team is working closely with UT System, legal affairs, our federal consultants, and national research organizations to assess the implications and advocate for our research community. As you might imagine, national higher education associations, including the Association of American Universities (AAU), the American Council on Education (ACE), the Association of Public and Land-grant Universities (APLU), and  the Association of American Medical Colleges (AAMC), have expressed concerns about this new 15% cap. Legal challenges to halt or modify the policy appear likely, and we anticipate further developments in the coming weeks. We will continue to monitor these discussions closely and communicate directly with impacted researchers as we receive more information.  

Key Considerations for NIH-Funded Researchers

· Proposal Submissions: Until we issue further guidance, all NIH proposals should continue to be submitted in accordance with UTSA’s full F&A rate. Applications for fellowships and training grants should be submitted with their stipulated rates. 

· New, Continuing, and Supplemental Awards: The Office of Sponsored Projects (OSP) will hold any NIH awards that specifically reference the 15% F&A rate until this issue is resolved. This includes pass-through awards where UTSA is a subrecipient. OSP will not set up pre-award accounts for these awards. 

· Budget Implications: We recommend that investigators continue to prepare proposals based on current guidelines. If changes are implemented, existing and future budgets may need adjustments, but OSP will provide guidance to ensure a smooth transition. 

Next Steps

We know that uncertainty around funding policies can be frustrating, but please know that we are watching this issue closely and will continue to advocate for the great work being done here at UTSA. We will provide updates as soon as definitive information becomes available. 

If you have immediate concerns regarding your NIH-funded projects, please contact your program officer or sponsor contact.

For UTSA-specific questions, Lori Schultz, Senior Associate Vice President for Research Administration, is monitoring the situation and is available to assist. Thank you for your patience as we navigate this evolving situation. We understand the challenges this may present and will continue to share information and guidance as we learn more. 

Sincerely, 

JoAnn Browning, Ph.D., P.E., Dist.M. ASCE

Interim Vice President for Research 

The University of Texas at San Antonio

Office of Research

One UTSA Circle 
San Antonio, TX 78249-3209