Posted: February 8, 2025

Dear Colleagues,

Late in the day on February 7, the NIH released supplemental guidance setting a "standard indirect rate of 15% across all NIH grants for indirect costs in lieu of a separately negotiated rate for indirect costs in every grant.” Indirect cost rates are negotiated on a regular cycle with the federal government and are based on extensive auditing of what it actually costs to conduct research at an institution. Indirect funds are allocated to cover the research-related costs of things like buildings and infrastructure, IT, compliance, and research administration. At Lehigh, for every dollar spent directly on research (e.g., salaries of students and research personnel, supplies, and equipment), it costs approximately an additional 71 cents to support that research. Our indirect cost recovery rate is currently 65%, which means that the university contributes six cents for every dollar beyond what we receive from the federal government.

Questions remain about the details of how this new indirect cost rate would be implemented. What we do know is that establishing a uniform 15% indirect rate would have a serious financial impact on every research university across the country, including Lehigh. We have also learned over the past few weeks that announcements do not always result in implementation. In this case, we expect rapid legal action to at least delay the proposed change. Members of Lehigh’s leadership are working with professional organizations, our government relations team, and colleagues across the country to communicate with policymakers about the critical value of research conducted at universities like Lehigh and around the nation.

We may see similar announcements from other agencies in the coming days and weeks. We will be tracking all of them and when we have concrete information to share, we will communicate it as soon as we can. If you have specific questions about a funded project or if you receive communications from federal agencies, please contact Cynthia Kane and your Contract and Grant Specialist. For more general questions or comments about how the university is responding to directives from the new administration, please reach out to Dom Packer.

We encourage you to continue submitting grant proposals as planned. Barring any other information, proceed according to existing solicitation guidelines. VPR staff will hold an open forum this Thursday (February 13) from 12:00 - 1:00 pm in STEPS 102 as an opportunity for you to ask questions in person. Feel free to bring your lunch, we will have coffee and dessert.

Best wishes,

Dominic Packer
Associate Vice Provost for Research

Cynthia Kane
Associate Vice Provost for Research and Sponsored Programs

Anand Jagota
Vice Provost for Research

Nathan Urban
Provost