Dear Research Leaders and Colleagues, 

Due to the rapidly evolving nature of ongoing federal research policy changes, I will share more regular communications on what we know and any updated guidance. Please help us continue to highlight the most salient points. If you are aware of a new concern that we haven’t addressed below or have received new information that should be shared broadly in this update, please email my office at vcresearch@ucsd.edu. 

We continue to track award disruptions and delays. If you receive a termination or stop work order from your funding agency specifically for your award, email vcresearch@ucsd.edu. While we weather this situation, when disruptions to sponsored project funding occurs, campus urges units to assess the situation and take any actions needed with the approval of legal counsel and your division’s leadership. We recognize that these award disruptions and delays are incredibly stressful to campus as a whole and are devastating to the important work of the principal investigators (PIs) and teams that are directly impacted. 

The following updates address new terms, conditions or revisions from federal agencies: 

Federal Updates on Award Terminations and Funding Challenges 

The current count of award terminations has reached 85, resulting in over $33 million in financial exposure (pending reimbursements and obligated funds not yet encumbered). (This week’s full update is available here.) Unpredictable terminations persist, but many are still linked to DEI initiatives. Significant delays in new awards and drawdowns, particularly with NIH, are causing additional concern.  

Federal Updates on DOD IDC 

The Department of Defense (DOD) recently issued an unofficial notice regarding a 15% IDC cap on proposals. This has not been officially recognized, leading to confusion among program officers. PIs and fund managers should use our federally negotiated IDC rate on all proposals, even if requested by a program officer to reduce the IDC rate.  

NIH Foreign Sub-Awards 

On May 1, NIH updated its policy on foreign subawards, which restricts current contracts and could necessitate renegotiation of approximately 70 UC San Diego foreign subawards before the federal fiscal year ends on September 30, 2025. Specific details of the updated policy are forthcoming and PIs are still advised to consult with their program officers and wait for new NIH guidance expected before September. 

Compliance with Civil Rights Laws and Attestations 

The Sponsored Projects Office (SPO) has been flagging and evaluating non-standard terms in federal agreements by identifying risks and collaborating with university counsel for guidance. Several unique terms have been successfully resolved, including those related to compliance with foreign gift disclosures and civil rights assurances. The aim is to negotiate terms that do not impose any additional obligations beyond those required by law. If PIs or Research Administrators receive award amendments, attestations, or requests to change the terms of existing awards or proposals under review, please contact SPO before agreeing to any changes. 

Federal Budget Updates and Implications 

A newly released NSF FY 26 Budget Request for Research and Related Activities (R&RA) indicates a deep and devastating 64% cut. This is a proposed amount that will be subject to House and Senate reconciliation and review. 

Bridge Funding Options Under Review  

Current guidance from the CFO's office regarding personnel funding states that moving grant-funded personnel to core funds is not advisable under the current circumstances. With regard to graduate students funded on grants that have been terminated, the department should first use non-core funds (other grant funds or gift funds). However, if the only option is for a department to use core funds (via a TAship, a GRship, or Block Grant), the department may do so. Units should bring additional questions regarding any other personnel to their Dean or VC for guidance. 

Follow-ups on previous reports: 

  • False funding freeze claims: A Nature article on 5/1/25 incorrectly claimed the NSF was freezing all funding based on a leaked memo. A correction was issued on 5/6/25. Appropriations staff confirmed the intent is for agencies to spend all FY25 funds. 
  • Potential Fund distributions on the horizon: NIH is currently $3 billion behind in distributing FY25 funds. Agencies are expected to make a concerted effort to push out funds starting in August, before the fiscal year ends on September 30th. 
  • Award Terminations & Appeals: UCOP’s Office of General Counsel has advised against appealing agency termination of grants because such appeals have been unsuccessful, and submitting an appeal may exclude a grant from relief granted by court action. However, if a PI chooses to appeal, please contact the Office of the Vice Chancellor for Research for support at vcresearch@ucsd.edu. The subsequent appeal must be reviewed by external counsel retained by UCOP and submitted by AVC Ross Dammann on behalf of the University. 

Best regards,

 

Corinne Peek-Asa Ph.D.

Vice Chancellor for Research and Innovation

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