The document, authored by the Council on Governmental Relations (COGR), examines the challenges universities face under current federal cost policies for research funding. It presents the institutional financial perspective and illustrates, through five detailed case studies, how restrictions by federal agencies and the Office of Management and Budget (OMB)—such as caps on cost recovery, limits on administrative and facility cost reimbursement, artificial distinctions in interest costs, and inequitable energy cost recovery—constrain universities' ability to manage research resources effectively. These constraints often force higher education institutions into making decisions that may prioritize financial viability over academic or scientific value, potentially undermining the intended national benefits of federally supported research.
The executive summary and conclusion highlight that, while governmental cost-saving measures aim to protect taxpayer interests, they can paradoxically increase public costs and reduce national research capacity. The array of restrictions collectively narrows the range of university decision-making, introducing artificial economic factors into research planning. The document argues for revised business models and incentive structures that better align federal policy with the operational realities and legitimate business constraints of academic institutions. It advocates for policies that enable universities to exercise sound academic judgment in alignment with national research and educational objectives, rather than forcing choices based predominantly on cost recovery and regulatory limitations.
