"Compared to private industry contractors and federal laboratories, universities receive less from the federal government to cover costs indirectly related to research, according to a study commissioned by research university associations. Indirect costs can include building maintenance, utilities and compliance with patient safety regulations. Currently, individual colleges and universities negotiate reimbursement rates with federal agencies, but the Trump administration has sought unsuccessfully to cap funding for indirect costs at 15 percent of the research grant."
"It is important to note that the government's approach to indirect cost accounting and reimbursement for universities and nonprofit research organizations is different than its approach for other entities conducting federally sponsored research, the report states. This fact has contributed to the resulting confusion-and that confusion, in turn, is now imperiling the funding needed for America's research institutions to continue performing groundbreaking research that improves health, saves lives, and nourishes America's innovation ecosystem."
Universities receive less federal funding to cover indirect research costs compared with private industry contractors and federal laboratories. Indirect costs include building maintenance, utilities, and compliance with patient safety regulations. Individual colleges and universities negotiate reimbursement rates separately with federal agencies. The Trump administration attempted to cap indirect-cost funding at 15 percent of research grants, but federal courts blocked those efforts. A coalition of higher-education associations proposed an alternative model for federal research funding. Differences in accounting and reimbursement policies across sectors prevent direct rate comparisons, and effective reimbursement for university indirect costs is likely lower than for private companies.
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