OMB Proposes Major Changes to Federal Grant-making Rules

The Office of Management and Budget (OMB) issued a proposed rule on May 29 that would introduce sweeping revisions to the Uniform Guidance, the government-wide framework that governs federal grants and other financial assistance. The proposed changes include the most extensive revisions to the framework since it was established in 2013.

OMB is proposing to convert the Uniform Guidance from a guidance into binding regulations. This change would formalize directives related to grant-making and could allow future grant policy revisions to take effect across federal grant-making agencies through a single rule-making process.

The proposed rule would expand agencies' authority to suspend or terminate discretionary grant awards, including when an award is determined to no longer align with agency priorities or the national interest. It provides that peer-review recommendations are advisory and would require senior political appointees to review proposals before funding decisions are finalized. The proposed rule would also limit the use of federal funds for publication costs and would require express agency approval – included in the award’s terms and conditions – for conference attendance costs to be allowable. Additionally, it would establish new requirements affecting certain international research collaborations.

The proposal would apply broadly across federal grantmaking agencies, including the Department of Health and Human Services and the National Science Foundation. The changes could affect institutions that receive funding from National Institutes of Health and other federal agencies. Research institutions, universities, nonprofit organizations and other federal grant recipients could face new compliance obligations and administrative requirements if the rule is finalized.

The proposal is open for public comment through July 13. OMB stated that it intends to issue a final rule by Oct. 1.