DOD Implementation of 15% F&A Rate
Memo sent to RAC 6/18/25
Dear Colleagues,
On June 12, 2025, the Department of Defense (DoD) issued the attached memorandum implementing a 15% cap on indirect costs for assistance awards to institutions of higher education. This guidance would require immediate application of the 15% rate to new awards (grants and cooperative agreements) and mandate renegotiation of existing awards to align with the new cap by November 2025.
In response, several associations and academic institutions filed a lawsuit on Monday. As of yesterday afternoon, a temporary restraining order (TRO) has been issued, preventing DoD from enforcing the 15% indirect cost rate. This TRO will remain in effect until further notice from the Court.
Until further guidance is provided, UMB Principal Investigators (PIs) should continue to propose to DoD (as either a direct or prime sponsor) using UMB’s federally negotiated indirect cost rates.
If contacted by a DoD sponsor or a pass-through entity regarding renegotiation of an award or a request to utilize the 15% rate in a proposal, PIs and administrators should not respond directly. Instead, please forward any such communications to my attention at jill.frankenfield@umaryland.edu
Please share this communication with your PIs and colleagues.
Any questions can be directed to my attention.
Thank you,
Jill
Jill A. Frankenfield
Associate Vice President, Sponsored Programs Administration
Attachments:
DoD Implementation of SECDEF Indirect Cost Cap Memo 2025-06-12
Order Granting Plaintiffs' Motion for Temporary Restraining Order 061725