DOE Implements 15% Indirect Cost Cap on Higher Education Grants
April 29, 2025 update:
The U.S. District Court for the District of Massachusetts extended the temporary restraining order, which will remain in effect until a further order is issued resolving the request for a preliminary injunction.
April 16, 2025 update:
April 16 update: On April 16, 2025, the U.S. District Court for the District of Massachusetts granted a Temporary Restraining Order (TRO) in the case Association of American Universities et al. v. U.S. Department of Energy. This order immediately halts enforcement of the Department of Energy’s new policy limiting indirect cost (Facilities & Administrative, or F&A) recovery to 15% for Institutions of Higher Education.
Under the TRO, the DOE and its representatives are prohibited from:
- Implementing or enforcing the 15% indirect cost cap.
- Modifying negotiated indirect cost rates outside the normal statutory and regulatory processes.
- Terminating any grants based on a grantee’s refusal to accept a lower indirect cost rate.
The TRO will remain in effect until further order of the court. A hearing on the matter is scheduled for April 28, 2025.
The University of Maine is continuing to monitor this evolving situation closely. Principal Investigators (PIs) should immediately forward any communications received from the Department of Energy regarding the 15% F&A policy to ora@maine.edu for tracking and institutional response.
We will provide additional updates as new information becomes available.
April 16, 2025 update:
On April 11, 2025, the U.S. Department of Energy (DOE) issued a policy update (Policy Flash 2025-22) that standardizes the indirect cost recovery rate for all grants to Institutions of Higher Education (IHEs), including the University of Maine System, to 15%. This replaces the long-standing practice of accepting institutionally negotiated rates, which often exceeded this threshold. Indirect costs (also known as Facilities and Administrative or F&A costs) include essential expenses such as building depreciation, utilities, administration, and compliance functions critical to supporting research.
The new policy will apply to all future DOE awards to IHEs and may impact the funding available for administrative and infrastructure support associated with federally sponsored research. The DOE has also indicated that it will terminate existing grants that do not comply with this new policy, with affected recipients to receive specific notices and guidance.
The University of Maine is currently monitoring this change and how it may be implemented against current and future awards. Additional guidance will be provided as more information becomes available from the Department of Energy.
For details, visit the official DOE Policy Flashes page.