KU receives new F&A rates for federally funded grants

From: Office of the Vice Chancellor for Research
Sent: Thursday, July 10, 2025, 3 p.m.
To: KU Lawrence/Edwards faculty & academic staff and research support staff

Dear Colleagues,

As legal proceedings continue over proposed cuts to indirect costs for federally funded research grants, federally negotiated facilities & administrative (F&A) rates remain in effect. KU has received its new rates, which are intended to extend through June 30, 2028, for the Lawrence/Edwards campuses.
 

New proposals and competing awards
The applicable new F&A rate must be used on all new and renewal proposals submitted after the new rates have been published unless limited by written sponsor policies, regardless of whether the sponsor is federal or non-federal. Please note that higher thresholds for equipment and the portion of subawards not subject to F&A are effective July 1, 2025, and are currently being used when preparing proposal budgets.

Current awards and non-competing continuations
Currently active awards will not be affected by the new rates unless the project enters a new competitive cycle. Those projects with “out years” already identified in the original award budgets will continue to use the applicable F&A rate in effect at the time of the original first-year award. This follows federal regulations that require the same rate to be used during the life of the sponsored project. The federal government defines “life” as the period of time awarded in a competitive cycle.

New awards
Some proposals submitted before the receipt of the new F&A rates may still reflect the previous rates. For federally funded awards, the Office of Research will maintain the originally proposed direct costs and will not adjust the budget to accommodate the updated rate. For non-federal awards, an adjustment request will only be made to the sponsor if the increase in F&A costs exceeds $1,000. If the sponsor does not approve the adjustment, the originally proposed rate will be applied when setting up the award.

Federal policy updates
Several federal agencies — including the National Institutes of Health, Department of Energy, National Science Foundation, and Department of Defense — have proposed a 15% cap on indirect costs for federally funded research grants. This policy change would significantly reduce the amount of indirect costs research institutions can recover, impacting ongoing research programs and infrastructure.

However, enforcement of these limitations has been temporarily halted. A U.S. district court issued a nationwide preliminary injunction against NIH’s implementation of the policy on March 5. Additional lawsuits challenging the policy have been filed by multiple states, universities and research associations. As legal proceedings continue, federally negotiated rates remain in effect. We will continue monitoring federal policy developments and provide updates as necessary.

If you have questions, please consult F&A rate agreements information on the KU Research website or contact Pre-Award Services at kucrpremgmt@lists.ku.edu.

Respectfully,
Alicia

Alicia Reed
Assistant Vice Chancellor for Research