Proposed Grantmaking Reforms Prompt Huge, Negative Response

The Office of Management and Budget’s proposed changes to federal grantmaking attracted nearly half a million comments, with many science groups calling for OMB to completely withdraw its proposal. OMB’s proposed rule would give political appointees the power to decide what research is, or is not, funded by the federal government, among other changes.

By the close of the public comment period on July 13, the proposed rule had received 496,769 comments, over 50,000 of which have been made publicly accessible so far. While a full analysis of the comments is not yet possible, it is clear that many commenters have grave concerns about OMB’s proposed rule, which has a targeted effective date of Oct. 1. One analysis of the published comments, undertaken by STAT and researchers at the University of North Carolina at Chapel Hill, found that around 95% opposed the rule, with just 1% supporting it.

The proposed regulation would convert OMB’s Uniform Guidance for federal financial assistance into binding regulation, while making sweeping changes to grant administration, merit review, award termination authority, allowable costs, and compliance requirements. OMB says the changes will improve accountability, transparency, and stewardship of taxpayer dollars while reducing administrative burden — an assertion that many groups representing research organizations contested in their public comments.

COGR, a membership organization which represents over 230 research institutions, submitted a detailed 153-page response to OMB’s proposed rule, urging the office to withdraw the proposal in its entirety. COGR argued it would “profoundly alter and harm” the partnership between the federal government and research institutions by increasing administrative burden, weakening scientific merit review, and creating broad authority for agencies to terminate grants based on shifting administrative priorities.

While OMB characterizes its proposed rule as a modernization of the Uniform Guidance, COGR said the changes represent “an unprecedented and fundamental restructuring of the government-wide framework governing federal grantmaking and financial assistance.” COGR argued that OMB lacks the statutory authority to convert its Uniform Guidance into binding government-wide regulation, noting that Congress vested grantmaking authority to individual agencies, not OMB, and that creating centralized regulation may conflict with statutes requiring merit-based peer review at agencies such as the National Science Foundation and the National Institutes of Health.

COGR also criticized OMB’s targeted Oct.1 implementation date as unrealistic, arguing that universities would need at least a year after publication of any final rule to revise their financial systems, institutional policies, compliance procedures, training materials, and award management practices. COGR instead recommended delaying implementation until October 2027 or one year after publication of the final rule, whichever is later.

In the weeks following the May 29 publication of OMB’s proposed rule, hundreds of organizations, including COGR, the American Council on Education, and numerous higher education associations, requested that OMB extend its 45-day public comment period to give respondents more time to consider the legal, operational, and financial impacts of the proposal. Several high-profile politicians, including Sen. Susan Collins (R-ME), also requested an extension. OMB declined these requests. In its public comment, COGR said this compressed timeline may have prevented institutions from gathering the institutional data needed to fully evaluate the proposal and identify all its potential consequences.

ACE and the American Association for the Advancement of Science both asked OMB to completely withdraw its proposed rule, while the Association of American Universities recommended that OMB withdraw or substantially revise many of its provisions. In addition to concerns about undermining merit-based funding and increasing uncertainty for researchers, many science organizations also objected to new restrictions on allowable research costs, including publication costs, expanded compliance obligations, new restrictions on international research collaboration, and language incorporating executive orders that remain the subject of ongoing litigation, particularly related to diversity, equity, and inclusion initiatives.

The volume of responses OMB received “underscores the research community’s deep concern about the future of U.S. science and researchers’ ability to drive discoveries that improve public health, strengthen national security, and strengthen economic growth,” said Joanne Padrón Carney, chief government relations officer for AAAS, in an emailed comment. While OMB officials are not obliged to modify the proposed rule, they “do need to demonstrate that they read and are responding to those concerns, even if simply posting a counter argument,” Padrón Carney said. She added that OMB may implement the proposed rule in full, delay implementing a final rule, seek a second round of comments on a modified rule, or implement just a portion of the rule.

Given the negative response to OMB’s proposal, it is possible that the office will face legal challenges if it pursues implementation. If that happens, OMB’s response to the comments could become important, as litigants may seek to argue that the office failed to adequately respond to the substantive objections it received. In its public comment, COGR requested that OMB explain how public comments will be reviewed, including whether it will use AI during its evaluation process. COGR also recommended that OMB offer respondents the opportunity to review any revisions before the final regulation is issued. OMB did not respond to a request for information on how it plans to evaluate comments on the proposed rule.