Principal Investigators,
As we have shared on our Federal Funding Updates webpage and at the recent Division of Research and Economic Development (DRED) Townhalls, the National Science Foundation (NSF) has published Policy Notice: Implementation of Standard 15% Indirect Cost Rate (NSF 25-034) (the “Policy”), which restricts indirect costs on new NSF awards to an indirect rate of 15% Modified Total Direct Costs (MTDC). However, the Policy was vacated as of June 20, 2025 by the U.S. District Court for the District of Massachusetts and therefore cannot currently be implemented by NSF.
The Office of Sponsored Programs (OSP), however, is in receipt of new awards and amendments from NSF that include a term and condition that applies the Policy by restricting indirect costs to 15% MTDC for the entirety of the Award if a future court decision allows the Policy to be reimplemented. This means that NSF could claw back already drawn and distributed indirect costs in excess of the 15% MTDC indirect cost rate.
Unless there is a formal requirement to apply the lower indirect rate, the OSP will continue to charge our federally approved indirect cost rates and will distribute indirect costs according to our normal policies and procedures, including for the NSF awards with this term and condition. If an NSF award or amendment contains the term and condition, the Frevvo approvers for the PI’s department/college will receive a notification from sponsoredagreements@boisestate.edu that the term and condition applies to the award and will provide additional guidance. If you do not receive a notification, you do not need to worry about this issue for your NSF awards.
For the applicable awards, OSP is encouraging Colleges and Departments to establish holding accounts for any recovered indirect costs that exceed the 15% MTDC recovery limitation. DRED and other central campus units will not have any funds to cover any portion of recovered indirect costs that could be clawed back. The management of these holding accounts may vary between Departments and/or Colleges. We are also actively developing a report to share with Colleges, Departments, University Financial Services, and DRED that will provide monthly guidance on what indirect costs should be held.
OSP will continue to keep you up to date on the NSF and federal funding situation as we move forward. Please refer to OSP’s Federal Funding Updates webpage for more updates. Thanks for being patient and working with us during this period of federal funding landscape change!
If you have any questions about the Policy or OSP’s guidance on this Policy, please contact us at osp@boisestate.edu.