A federal judge has stalled the U.S. Department of Energy’s plan to make steep cuts to research funding after the University of Utah and a consortium of other universities filed a lawsuit against the federal agency.
U.S. District Judge Allison D. Burroughs of Massachusetts put a temporary restraining order on the DOE’s policy capping the rate of indirect costs for grants at 15% on Wednesday. The judge’s order requires the energy department to send status reports biweekly to prove they are continuing to award grants at their previously agreed-upon rates.
The U and its co-plaintiffs, the Association of Public and Land-grant Universities, the Association of American Universities and the American Council on Education, filed their lawsuit against the DOE on Monday morning. The legal complaint argues the energy department’s funding cap on indirect costs — which includes spending on administrative overhead and infrastructure needed to conduct research — is “flagrantly unlawful.”
“If DOE’s policy is allowed to stand, it will devastate scientific research at America’s universities and badly undermine our nation’s enviable status as a global leader in scientific research and innovation,” the lawsuit reads.
The energy department revealed its memorandum standardizing indirect cost rates on April 11. The DOE’s funding cap only applies to grants issued to universities and colleges. The memo states the fixed rate is meant to curb wasteful spending by researchers and claims the policy will divert an estimated $405 million back to government coffers annually.
While the federal government argues indirect cost rates above 15% are a sign of careless spending, the plaintiffs contend universities negotiate higher rates to meet their institution’s specific needs.
“Differences in indirect cost rates do not reflect undeserved government subsidies,” the legal complaint reads. “Rather, institutions have different indirect cost rates because they engage in different types of research and have unique mixes of fixed and variable institutional costs that are appropriately allocated across multiple research projects or other cost objectives.”
Judge Burroughs gave the DOE until next Tuesday to respond to the lawsuit. She scheduled oral arguments for April 28.
The U secured $80 million in research funding from the DOE in the 2023 fiscal year. Kevin Whitty, associate dean for research in the U’s College of Engineering, said the active DOE grants support the work of 52 Principal Investigators (PIs) in 18 different departments and institutes throughout the university,
“And then if you consider co-PIs, post-docs, research staff, graduate students [and] undergraduates, it’s several hundred people supported at the University of Utah under Department of Energy awards. So, this is concerning news,” Whitty said at Tuesday’s weekly research town hall.
The energy department’s 15% ceiling on indirect costs is nearly identical to the funding cap the National Institute of Health attempted to enact in February. However, Whitty said DOE awarded grants pose unique challenges because, unlike grants dispensed by the NIH, the energy department requires cost-sharing for most of the research projects it directly funds, with universities covering 20% of the research expenses.
Still, the NIH’s decision to cap indirect costs at 15% faces similar legal challenges.
The U entered into a lawsuit against the NIH shortly after the public health agency announced its policy change. On April 5, a federal district judge permanently blocked the NIH’s 15% indirect cost rate from taking effect. The Trump administration promptly appealed the district judge’s decision.
