A federal judge has temporarily halted the U.S. Department of Energy’s (DOE) plan to significantly reduce research funding, following a lawsuit filed by the University of Utah and a coalition of other universities.
On Wednesday, U.S. District Judge Allison D. Burroughs issued a temporary restraining order against the DOE’s new policy that limits the rate of indirect costs for grants to 15%.
This order mandates the DOE to provide biweekly status reports, demonstrating that they continue to award grants at the previously agreed-upon rates.
The lawsuit, filed by the University of Utah in conjunction with the Association of Public and Land-grant Universities, the Association of American Universities, and the American Council on Education, was submitted on Monday morning, arguing that the DOE’s funding cap on indirect costs is “flagrantly unlawful.”
According to the lawsuit, allowing the DOE’s policy to stand would devastate research initiatives at American universities and threaten the country’s status as a leader in scientific research and innovation.
The DOE introduced its memorandum standardizing indirect cost rates on April 11, stating the fixed 15% rate intends to curb wasteful spending by researchers while claiming the policy could redirect approximately $405 million back to the government annually.
While the federal government asserts that indirect cost rates higher than 15% indicate careless spending, the plaintiffs argue that universities negotiate higher rates to cater to their distinct operational needs.
The legal complaint emphasizes that variations in indirect cost rates do not signify unwarranted government subsidies; rather, they reflect the unique research activities and institutional costs that each university manages.
Judge Burroughs has given the DOE until next Tuesday to respond to the lawsuit and has scheduled oral arguments for April 28.
The University of Utah received $80 million in research funding from the DOE during the 2023 fiscal year.
Kevin Whitty, the associate dean for research in the U’s College of Engineering, expressed concern at a recent research town hall about the implications of the funding cuts.
Whitty noted that the active DOE grants support a total of 52 Principal Investigators (PIs) across 18 different departments and institutes at the university.
He further stated, “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.”
The 15% ceiling on indirect costs set by the DOE is nearly identical to a similar funding cap attempted by the National Institutes of Health (NIH) earlier this year.
However, Whitty highlighted that DOE grants present unique challenges, as they typically require cost-sharing, with universities responsible for 20% of the research expenses.
The NIH’s previous attempt to impose a 15% indirect cost cap has also faced legal challenges, leading to a lawsuit initiated by the University of Utah shortly after the announcement.
On April 5, a federal district judge issued a permanent block on the NIH’s 15% indirect cost rate, but the Trump administration promptly appealed this ruling.
As legal battles continue, the outcome will be critical for the future of research funding at universities nationwide.
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