Federal Funding Landscape Changes: Executive Orders Impact Research Grants

The Current Federal Funding Landscape Katie Rountree Executive Director, Department of Contracts and Grants Office of Research & Innovation

CONTENTS 1 Executive Orders 2 F&A Rate Restrictions 3 FY2025 Federal Budget Stop Work Orders, Termination & Appeals 4 Request/Required Change of Scope 5 Guidance for Proposals and Awards 6

Executive Orders Related to Diversity Equity and Inclusion (DEI) Executive Order 14151, titled Ending Radical and Wasteful Government DEI Programs and Preferencing, Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity Restrictions on DEI-Centered Grants Federal research funding may now exclude proposals that incorporate diversity, equity, and inclusion (DEI) goals as central criteria, limiting research scope in the social sciences, education, and health equity. Grant Evaluation Criteria Shift Emphasis will be placed on merit-based evaluation, potentially deprioritizing projects that account for systemic inequality, representation, or identity-based community outcomes. Termination of DEI and Environmental Justice Programs Federal agencies are directed to eliminate all Diversity, Equity, Inclusion, and Accessibility (DEIA) initiatives, including those related to environmental justice. This affects federally funded research programs that incorporate DEI components. Review of Past Funding for DEI and Environmental Justice Agencies must review grants to identify those supporting DEI or environmental justice, potentially leading to funding revocations. Certification Requirements for Federal Grantees Universities receiving federal funds may be required to certify that they do not operate programs promoting DEI in ways deemed inconsistent with federal anti-discrimination laws. 3

Executive Orders Related to Gender Ideology Executive Order 14168 titled Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government Restrictions on Gender-Related Research Research projects that explore gender as a social construct or support transgender health and identity may face increased scrutiny or ineligibility for federal funding. Increased Risk of Grant Cancellation Existing awards supporting research into gender identity, LGBTQ+ populations, or non - binary frameworks could be subject to retroactive review and potential defunding. 4

Executive Orders related to Climate Research Executive Order 13783 Title: Promoting Energy Independence and Economic Growth Reduced Climate Research Funding The EO led to the rollback of federal climate initiatives and deprioritized climate change as a focus area, resulting in decreased funding opportunities for university researchers studying climate science, environmental policy, and renewable energy. Program Cuts at Key Agencies Federal agencies like EPA, NOAA, NASA, and DOE scaled back or restructured climate-related programs, affecting grants, fellowships, and research collaborations with academic institutions. Shift Toward Fossil Fuel Research The EO signaled a federal shift toward supporting fossil fuel development. This reprioritization funneled research dollars toward oil, gas, and coal technologies. 5

Executive Orders Implementing DOGE Cost Efficiency Executive Order 14158 Establishing and Implementing the President's "Department of Government Efficiency Impact on Federal Staffing Reduced staffing levels and unexpected layoffs at federal agencies may lead to significant delays in response times to inquiries. Delays in Grant Processing Procedural changes could result in slower approval or reimbursement timelines due to additional level of reviews or requirements. Reprioritization of Funding Streams Agencies may be not fund or end projects deemed high-efficiency or no longer a priority. 6

F&A Rate Restrictions NIH F&A Rate Proposed @ 15% - Currently under injunction DOE F&A Rate Proposed @ 15% - Currently under injunction Implication: USC will continue using federally negotiated rates at this time (e.g., 66% MTDC for on-campus research). Applies to all current and future awards. 7

Status of Federal Budget Continuing Resolution in Place The government is operating under a continuing resolution (CR), which temporarily extends prior year funding levels until end of Government Fiscal Year 9/30. Proposed Budget Under Review The President s budget request for next fiscal year is with congress for finalization and approval. Congress is working on determining the details that will make up the approved framework. 8

Stop Work Orders, Terminations & Appeals (Updated 4/21/2025) Current Situation: USC currently has 10 active stop work orders (partial/full) and 28 termination notices (partial/full). Action Plan: Please promptly notify your DCG Officer so we can assist. DCG will evaluate each case and work with PIs to submit appeals with PI consent where appropriate/possible. 9

Request/Required Change of Scope (Updated 4/21/2025) Current Situation: USC currently has 7 notices requesting and/or requiring the scope be modified to address conflicts with Executive Orders. These have been received at a variety of stages, some pre-award and some mid award after submission of progress report. Action Plan: Please promptly notify your DCG Officer so we can assist. DCG will evaluate each case and work with PI s to submit appeals with PI consent where appropriate/possible. 10

Guidance on Proposal Submissions General Advice: Continue to prepare and submit proposals. If the opportunity continues to be available in a federal system, proposals should continue to be prepared and submitted. Agency Modifications: Some agencies (e.g., NIH Diversity Supplements) have removed funding announcements or modified requirements. PIs should monitor these changes and adjust submissions accordingly. Action: Check funding websites or Grants.gov for updates and sign up for any agency alerts. 11

Guidance for USC Awards Ongoing Work: Continue to work on awards unless directed otherwise. Speedy Setup: To avoid delays in set up submit IRB or IACUC early and ensure all needed trainings and certifications are in place. No Cost Extensions: Sponsors may begin restricting one-year extension options, making no-cost extensions more difficult to obtain. Carryforwards: Sponsors may be less inclined to approve carryforward requests, making accurate budgeting and timely spending increasingly critical. Approval should not be assumed. Timely Closeout: Ensure timely completion of reports and deliverables. Prioritize submission of technical reports or deliverables that are past or soon to be due. Review Grants Management Dashboard Cayuse Awards to identify upcoming and overdue final reports. 12

Next Steps & Summary PIs should continue their research unless explicitly impacted by legal or funding changes. Stay informed on further updates related to the Executive Orders and funding guidelines. Continue to rely on official guidance from DCG for updates and compliance. DCG Newsflash: https://dcg.usc.edu/dcg-newsflash/ DCG Website: Notifications Regarding Federal Directives USC Website: Executive Orders and Agency Memos 13