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A federal judge has temporarily blocked an attempt by the Department of Defense to cut funding for university research programs, perhaps inadvertently saving the DoD from an own-goal.
Since World War II, the DoD has made significant awards to university research projects in a wide variety of subject areas. According to the DoD's Research Directorate, research programs funded by the Pentagon can involve practically anything provided they "may lead to enhanced warfighter capabilities, and strategic and tactical advantage."
A University of Kansas guide for faculty seeking DoD research grants states that most research funding comes through broad agency announcements that indicate the DoD's interest in funding particular types of research. A look at government grant programs that are currently available suggests the Pentagon is currently willing to fund everything from explorations of the use of AI for maritime security, to cancer research, to topics as broad as "revolutionary" microsystems technology.
The University of Kansas said that around 60 percent of basic research funding goes to universities on an annual basis.
These grants include indirect cost awards, which are necessary to support research projects, but which aren't unique to any single project. According to a lawsuit filed this week by 15 universities, college governing boards, and higher education associations, those costs can include things like "specialized nuclear-rated facilities; computer systems to analyze enormous volumes of data; information-technology and utility systems providing the backbone for those efforts," researchers and staff who keep such systems running, facilities maintenance, and other expenses needed to support the work researchers are doing.
According to the lawsuit, reimbursement rates negotiated by institutions and the government "often fall between 50 and 65 percent," but Hegseth said in a May 14 memo [PDF] that the DoD intended to cap rates at 15 percent across the board.
"Our objective is not only to save money, but to repurpose those funds," Hegseth explained, "toward applied innovation, operational capability and strategic deterrence."
Hegseth's letter includes plans to revisit existing awards and negotiate universities down to the 15 percent rate - those that refuse will have their awards terminated and reissued "under revised terms," the memo explained.
The higher ed plaintiffs filed a lawsuit [PDF] against the Department of Defense and Defense Secretary Pete Hegseth on Monday to reverse the move, and then asked for a temporary restraining order (TRO) the next day to pause it immediately.
The universities explained in their TRO request that the letter puts them in the impossible position of either submitting to the Pentagon's demand and possibly losing the funding permanently, or refusing to budge from earlier negotiated rates, which means the DoD might "reject the proposals out of hand."
With thousands of pending funding proposals on the table and many more already in place, the plaintiff universities argued their TRO was necessary "because the harms from DoD's unlawful Rate Cap Policy will be immediate, irreparable and compounding."
Judge Brian Murphy of the US District Court of Massachusetts agreed, granting a TRO to block the DoD's 15 percent cap. The court scheduled a return hearing for July 2, and ordered the TRO to remain in effect until further order of the court.
Once in court, the DoD will need to explain how its actions don't infringe on the Administrative Procedure Act in a multitude of ways, as charged in the lawsuit. The universities who stand to lose funding have accused the Pentagon of six counts of violating the APA, including illegally departing from negotiated cost rates, unauthorized action, unlawful termination of existing grants and arbitrary and capricious action.
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The Pentagon is following other government agencies in trying to cap indirect research funding at 15 percent, and several similar court battles are underway.
The National Institutes of Health was the first to try to limit indirect cost reimbursement, and a judge permanently enjoined it from doing so in April. The Department of Energy tried a near identical move, and is now under a temporary restraining order pending further court hearings.
The National Science Foundation has likewise made a near identical proposal to the DoD, NIH and DoE, but agreed to pause its own implementation until a hearing on June 20.
The DoD declined to comment on the case, and directed us to the Department of Justice, which said it had no comment on the matter. ®
