The document presents the proceedings and content of a May 2025 virtual town hall hosted by the Joint Associations Group (JAG) on Indirect Costs, focusing on the longstanding Facilities & Administrative (F&A) cost reimbursement system in academic research. Dr. Kelvin Droegemeier led a historical overview, explaining how the current F&A model developed from World War II-era collaborations between government and academia, evolving into a system where institutions upfront substantial administrative and facilities costs—later reimbursed by federal grants based on negotiated rates. The presentation underscored that F&A rates, though sometimes criticized or misunderstood as excessive, represent real, necessary expenses that sustain national research capacity, support compliance with proliferating federal mandates, and facilitate essential infrastructure and services—all of which are integral to the United States' global scientific leadership.
Recently, however, heightened scrutiny from federal agencies and policymakers—manifested in new caps on allowable F&A rates (as low as 15% from agencies such as NIH, DOE, and NSF) and ongoing governmental and public confusion about indirect costs—has jeopardized full institutional cost recovery, resulting in significant annual underpayments. The document details JAG’s initiative to respond proactively: major academic and research organizations have convened a broad team of subject matter experts to develop new, transparent, and equitable models for indirect cost funding. These models aim to address transparency concerns, administrative inefficiencies, and misperceptions regarding the use of F&A reimbursements. The process includes rigorous evaluation, input from the research community, parallel development of alternative approaches, and ultimately the proposal of a unified, actionable model to Congress and the White House, with the goal of preserving and strengthening the government-academic partnership essential to America’s research enterprise.
