Executive Order aims to reorganize federal grantmaking

A recent executive order from the White House aims to centralize federal grantmaking. This revamping of the grantmaking process would affect how decisions are made regarding the distribution of billions of dollars in research grants and have a significant impact on research universities. 

While the order notes, “nothing in this order shall be construed to discourage or prevent the use of peer review methods,” it sidelines the peer review process with the disclaimer, “provided that peer review recommendations remain advisory” to the senior appointees. These senior appointees are directed to “use their independent judgment.”  All final grant award decisions across all agencies are to be made by political appointees. 

The order also aims to make it easier to cancel grants at any point after the agency has given the award. The order directs agencies to make revisions to permit “immediate termination for convenience.”  

There are also new limitations that prohibit grant recipients from directly drawing down general grant funds for specific projects without the agency's permission. Grantees requesting a drawdown would be required to provide a written explanation for each request. 

The order also addresses indirect costs, noting that “(a) substantial portion of many federal grants for university-led research goes not to scientific project applicants or groundbreaking research, but to university facilities and administrative costs.” It directs the Office of Management and Budget to limit the use of discretionary grant funds for costs related to facilities and administration and directs agencies to give preference to institutions with lower indirect cost rates.