NSF F&A Update and Guidance

Update for planned proposals to NSF as of 5/15/2025:

As the NSF 15% F&A cap is being challenged in court, we learned that NSF will not reject outright any new proposals submitted to NSF at negotiated F&A rates simply because they do not comply with the new rate cap policy. Therefore, we are lifting the hold on NSF proposal submissions. For NSF proposals, please include the University’s full negotiated F&A rate with this caveat included in the budget justification: “Boston University requests our current federally negotiated rate, but we will accept the rate approved at the time of award.”

For new awards, we will continue to monitor budgets before acceptance if the F&A rate has been reduced to 15% and escalate for approval before processing. This includes incoming subawards funded by NSF.

Original Announcement on 5/6/2025

On Friday, May 2, the National Science Foundation announced a 15% F&A cap on new awards to institutions of higher education effective Monday, May 5. Details of this policy change are below:

  • The 15% rate maximum applies only to new awards made to institutions of higher education on or after May 5.
  • Recipients must use a rate no greater than 15% of modified total direct costs, as defined in 2 CFR 200.1.
  • This policy does not apply retroactively to existing awards.
  • Institutions are not required to amend budgets for awards issued before this effective date, nor will they be required to return previously reimbursed indirect costs.
  • Award supplements that are effectuated via amendments to awards in existence prior to May 5 are not subject to this policy.
  • Continuing grant increments are awarded under the original award terms and conditions; continuing grant awards in existence prior to May 5 are not subject to this policy.

On May 5, the AAU, along with the APLU, ACE and 13 AAU members, filed suit in the U.S. District Court for the District of Massachusetts to challenge the NSF’s new 15% F&A policy.

During this time, please continue work as normal. However, Sponsored Programs would like to hold proposal submissions to NSF, to the extent possible, until we receive additional information. We expect to know more next week about when a court may grant relief if it determines that the change was arbitrary and capricious and contrary to law.

  • For new NSF proposals during this time, we recommend including the University’s full negotiated F&A rate with this caveat included in the budget justification: “Boston University requests our current federally negotiated rate, but we will accept the rate approved at the time of award.”
    • We understand this goes against published guidelines and that there is a risk of rejection for non-compliance. This is why we would like to hold submissions until we learn more from the court’s ruling in the AAU’s legal challenge. If your proposal includes 15% F&A, we will escalate for approval before submission.
  • For current awards, there will be no change in the F&A rate as the policy change does not apply.
  • The University will not be making any changes to existing subawards.
  • For new awards, we will monitor budgets before acceptance if the F&A rate has been reduced to 15%. This includes incoming subawards funded by NSF.

We will share updates as we receive them. If you have any questions, please reach out to ospera@bu.edu.

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