Judge Blocks Energy Dept. Plan to Cap Indirect Cost Rates

A federal judge temporarily blocked the U.S. Department of Energy’s plan to cap universities’ indirect research cost reimbursement rates, pending a hearing in the ongoing lawsuit filed by several higher education associations and universities.

Judge Allison D. Burroughs of the U.S. District Court for Massachusetts wrote in the brief Wednesday order that the plaintiffs had shown that, without a temporary restraining order, “they will sustain immediate and irreparable injury before there is an opportunity to hear from all parties.”

Plaintiffs include the Association of American Universities, the American Council on Education, the Association of Public and Land-grant Universities and nine individual universities, including Brown, Cornell and Princeton Universities and the Universities of Michigan, Illinois and Rochester. They sued the DOE and department secretary Chris Wright on Monday, three days after the DOE announced its plan.

Department spokespeople didn’t return Inside Higher Ed’s requests for comment Thursday afternoon.

DOE’s plan is to cap the reimbursement rates at 15 percent. Energy grant recipients at colleges and universities currently have an average 30 percent indirect cost rate. The Trump administration has alleged that indirect costs are wasteful spending, although they are extensively audited.

The DOE sends more than $2.5 billion a year to over 300 colleges and universities. Part of that money covers costs indirectly related to research that may support multiple grant-funded projects, including specialized nuclear-rated facilities, computer systems and administrative support costs.

The department’s plan is nearly identical to a plan the National Institutes of Health announced in February, which a judge also blocked.