The Council on Governmental Relations (COGR), representing 190 major research universities and institutions, addressed a letter to Director Mick Mulvaney of the Office of Management & Budget and Secretary Thomas Price of the Department of Health and Human Services on June 12, 2017. In this correspondence, COGR expressed grave concerns regarding proposed reductions to the National Institutes of Health (NIH) budget, particularly the cuts related to Facilities and Administrative (F&A) cost reimbursement rates. COGR emphasized that F&A costs, which cover essential infrastructure and compliance expenses necessary for federally funded research, are real, tightly regulated and audited, and frequently underfunded, resulting in billions of dollars in unreimbursed institutional costs annually. The organization argued that further reducing F&A reimbursement would impose severe financial burdens on research institutions, potentially leading to program closures and significant reductions in research activities, given institutions’ limited alternative funding sources.
The letter also refuted comparisons between the federal F&A reimbursement system and the Gates Foundation’s model, noting key differences in allowable cost categorization and reimbursement scope, which make the Foundation’s approach neither comparable nor a feasible cost-saving alternative for federal research awards. COGR advocated for the effectiveness and relative efficiency of the current federal F&A reimbursement methodology, underscored the pivotal role federally supported research plays in driving biomedical and scientific advances, and requested that any substantial changes to research funding mechanisms be postponed until comprehensive, collaborative impact analyses are conducted. The letter concluded with a call for further dialogue with federal leadership to ensure informed decision-making that preserves the vitality and global leadership of the U.S. research enterprise.
