Dear Colleagues,
On Friday, May 2, The National Science Foundation (NSF) announced a new 15 percent Facility & Administrative (F&A) Cost Recovery policy for implementation today, Monday May 5, 2025. This new policy does not impact existing or continuations of existing awards. However, it does impact new awards for already submitted, and to-be-submitted, proposals.
As you may know, UMBC’s current F&A Cost Recovery rates are approved by the federal government (HHS is our Cognizant Federal Agency for our federally-negotiated F&A Rate Agreement across all agencies) after a comprehensive process that includes an audit and review of actual expenditures, as well as an extensive negotiation. The application of the federally approved F&A rates allows UMBC to recover the actual costs required to complete the proposed work in support of our research and creative achievement community.
This new NSF policy has no basis on UMBC’s actual costs. Acceptance of any rate that does not cover UMBC’s costs represents an unsustainable cost burden on UMBC. UMBC has been advised that any proposal submitted to or any approved award accepted from NSF at the 15% F&A rate may represent legal acceptance of this capped rate for all of our federal contracts and grants.
UMBC anticipates that, as with other agencies who have attempted similar policies, a Temporary Restraining Order (TRO) will be placed on this NSF F&A policy. However, there may be a gap between such a TRO and an award issuance or proposal submission.
Therefore, at this time, UMBC will only submit proposals to and accept awards from NSF utilizing our federally negotiated and approved F&A Cost Recovery rates. Please understand that there is a valid concern that proposals submitted with an F&A Rate above the 15% cap may be returned to the institution without review. We will not be able to accept any NSF awards with a 15% F&A cap at this time.
While we appreciate the potential negative impact this decision may have on members in our research and creative achievement community, we hope this gap guidance will become moot once a TRO has been issued.
To learn more about F&A at UMBC, please see the UMBC F&A Rate Information page.
Sincerely,
Dean A. Drake
Associate Vice President for Research and Creative Achievement