A message from the Vice Provost for Research regarding the reduction of indirect costs in NIH grants

Dear Colleagues,

Most of you have seen or heard about the announcement on Friday from the NIH that indirect costs for NIH grants are slated to be reduced to 15% starting on Monday.  The present negotiated rate for the University of Pennsylvania with the federal government is 62.5%.  The reduction would have a very significant impact on our schools and university.  Legal challenges are inevitable, and the Office of General Counsel is actively engaged.

More information on indirect costs (also called “F&A” or facilities and administration costs) can be found here, here, and here.  

According to the NIH itself, every dollar invested by the NIH in 2023 resulted in about $2.46 in economic activity.  NIH funding supports ~420,000 jobs directly in the US, and 2M more indirectly. This economic impact is in addition to the lifesaving therapies, training, and new knowledge that is produced, which can not happen without infrastructure and oversight supported by indirect costs. 

We are working with our government relations team, national organizations, and many others to convey the risks of the announced changes. We are hopeful that our lifesaving work will continue to be supported, and we will continue to work closely with leadership across the University to respond to this challenge. 

We will provide further information as it becomes available in the coming days. More detailed information can be found on the Office of Research Services website.

Dawn A. Bonnell

Senior Vice Provost for Research

Henry Robinson Towne Professor of Engineering and Applied Science