Sent to all federal PIs, research associate deans, other academic leaders, and central and departmental research administrators.
The Department of Defense (DoD) has issued a memo announcing the Implementation of a 15% Indirect Cost Cap on Assistance Awards to Institutions of Higher Education. DoD had previously shared plans to implement the rate cap but had not formally announced it.
Similar to the National Institutes of Health (NIH), the 15% indirect cost (F&A) rate cap applies to new awards effective immediately. DoD states that existing DoD grants and cooperative agreements will need to be renegotiated by no later than 11/10/25. At this time, we can continue to charge our negotiated F&A rates on existing grants.
The University of Minnesota has not approved the submission of proposals or acceptance of new awards at the 15% rate. Principal investigators (PIs) should continue to budget normally using the University's federally negotiated rates.
PIs should not take any action if they are contacted by the DoD sponsor. If contacted, they should forward the communication to their SPA Grant and Contract Officer (GCO) and copy both David Hagen and April Coon on the email. SPA staff will determine whether there is any action required.
If you have any questions, please feel free to reach out to David Hagen at [email protected].
Please continue to visit our SPA Federal Executive Orders and Other Policy Directives website for the most up-to-date guidance.
Sincerely,
April Coon, Director, Sponsored Projects Administration
David Hagen, Director, Office of Cost Analysis