Main Page
Upcoming Events
Your Comments
President Clinton Calls for Renewal of the Federal Government-University Research Partnership for the 21st Century
The review identified a number of actions that would help make the partnership more effective and efficient.

1. Research Integrity

Issue: Although a number of Federal agencies have policies regarding research misconduct, not all do, and variations in policy and practice send mixed signals to universities regarding Federal interests in this area. The interests of the Federal government will be advanced if greater uniformity can be brought to Federal policies in this area and universities will find more consistency in their interactions with government agencies.

Discussion: As a major funder, producer, and user of research, the Federal government has a vital interest in the integrity of the research record. Advances in science and engineering depend on the reliability of the record as do the benefits associated with them in areas such as health and national security. Sustained public trust in the scientific and engineering enterprise also requires confidence in the record and in the processes involved in its ongoing development. There will be occasions when it will be alleged that an individual researcher has failed to act in accordance with values of the scientific and engineering enterprise, values essential to public confidence in the enterprise and the integrity of the research record. In such cases, the Federal government must have clearly stated policies defining the circumstances under which it will consider that research misconduct has occurred in the course of Federally funded research, and guidelines for addressing such allegations.

ACTION: Institute Uniform Government Policies and Practices for Research Misconduct
  • The NSTC will complete the process initiated in 1996 to develop a government-wide definition of research misconduct and guidelines for handling cases of alleged research misconduct. The policy will affect all research funded by the Federal government, including both intramural research and extramural research funded through universities, non-profit organizations, and the private sector. Agencies will have twelve months to implement the new policy once it is finalized.

2. Merit Review

Issue: Although most parties would agree with the principle that excellence is promoted by rewarding merit, exceptions to merit review do occur in awarding research funds. It is in the interest of both the universities and the Federal government to ensure that merit review is well understood by the stakeholders, and to maintain the integrity of the process.

Discussion: Both universities and the Federal government need to be able to explain how funding decisions are made. When universities or other organizations seek research funds though non-merit-based means, the integrity of the enterprise suffers, which could ultimately undermine support for Federally-funded research. Both partners should seek ways to explain and defend the merit-review process, and to ensure that awards made outside of the merit review process decrease over time.

ACTION: Clarify and Extend Use of Merit Review in Awarding Research Funds
  • The NSTC reaffirms the principle of merit review in awarding research funds.
  • The NSTC supports OMB’s effort to refine the definition of merit review in its annual revision of the terms in OMB Circular A-11, "Preparation and Submission of Budget Estimates (part 1)."
  • The NSTC will examine ways to extend agency application of merit review in awarding research funds and seek ways to decrease practices that bypass the process.

3. Cost Sharing Policies and Practices

Issue: Cost sharing, as defined in OMB Circular A-110, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and other Non-Profit Organizations," is that portion of project or program costs not borne by the Federal government. With the exception of cost sharing that is required by law, agencies vary in their approaches to cost sharing and most do not have explicitly articulated, agency-wide policies. Individual program managers therefore often make decisions on a program-by-program basis. Actions taken by program managers may make sense from an individual program perspective—cost sharing can be a means of maximizing the number of awards within limited budgets—but the cost/benefit analysis may look different from an agency or even a national perspective. Universities have four principal sources from which to draw funds to support their activities. These are tuition, gifts, Federal funds, and state funds in the case of state universities. Ad hoc cost sharing practices can have a detrimental impact on the university research and education system as a whole (for example, by drawing funds for research from sources that would otherwise support undergraduate education). And while it can be in the government’s interest to accept universities’ offers to share in the costs of research in cases where it is not required, certain accounting rules tend to discourage universities from volunteering to do so.

Discussion: A number of issues identified by this review merit action:

  • Lack of clarity about agency cost sharing expectations creates difficulties.

Universities have indicated that lack of clarity about agency cost sharing expectations reduces their ability to plan financially. Unaware of an agency’s cost sharing expectations, a university may be caught short if it has submitted a proposal in response to a program announcement but does not learn in a timely way about the agency’s cost sharing expectations. Without knowing what are the "rules of the game," a university may be outbid by another and lose the award, or an agency may not receive the optimum level of cost sharing that it seeks. To avoid these difficulties, and to ensure a level playing field, it would be helpful if agencies announced, in advance, as part of their request for proposals in program announcements, if cost sharing is a criterion of award selection, and how, including explicit information regarding the amount of cost sharing expected and about the process by which cost sharing will be considered.

  • The Federal requirement that institutions absorb the overhead costs associated with voluntary sharing in the direct costs of a research project can create a disincentive against voluntary contributions of faculty time.

OMB Circular A-21 requires that all university research activities, regardless of their source of support (Federal, university, or private sponsor) be included in calculating total research costs. These total costs provide the basis for calculating the university’s Facilities and Administration (F&A) rate (also called indirect rate) and for determining the share of the F&A costs for which the Federal government will reimburse the university (the share is based on the portion of the total research that is supported by the Federal government). Consequently, when a faculty member who wishes to invest more time on a research project than already agreed to in the research proposal or than is required by the Federal agency as cost sharing, the time must be still be accounted for in the base of "organized research" for the purpose of computing the indirect cost rate. Universities regard this requirement as a double penalty; not only does the university bear the costs of the direct charges for faculty time spent on the project above that expected, but including those direct costs in the base of organized research decreases the F&A rate for the school for all projects.

The Federal government’s intent in requiring this accounting practice is to ensure that the overhead costs related to research activities (whether they are funded by the Federal government or by the institutions) are allocated to the benefitting activities. But it is worth noting that this level of precision in accounting normally will not fully account for faculty time beyond that required by the faculty member’s employment agreement with the institution. Moreover, faculty donate time to other activities that are central to the working of the research enterprise, yet this donated time is not a factor in calculating F&A rates, nor should it be, as these duties are rightly considered by the university as part of the faculty’s responsibilities. For example, agencies rely extensively on the expertise of university scientists and engineers to serve on agency advisory panels, peer review panels, and committees, often with no compensation, providing critical input that enables agencies to shape their research agenda and foster research excellence. Such activities are vital to the functioning of the partnership; indeed, they are central to it.

  • Limitations on institutional reimbursement of research costs on otherwise allowable costs should be reviewed.

Mandatory cost sharing stems from Federal cost principles and some statutes that limit institutions’ recovery of costs that are otherwise reimbursable, including limitations on indirect cost rates established by legislation. An issue of current concern to some agencies and universities involves the cap on administrative costs as it impacts universities that administer R&D laboratories for Federal agencies or have other relationships with the government that have procurement aspects. For relationships that are solely procurement in nature, the cap on administrative costs inappropriately forces universities to share in the administrative costs for the goods and services purchased by those agencies (unless the university’s administrative costs are at or below the cap).

ACTIONS: Clarify or Amend Cost Sharing Policies and Practices
  • The NSTC will explore mechanisms by which agencies might more clearly and consistently communicate information to universities about their cost sharing policies, practices, and expectations. One option might be to require that agencies announce when and how cost sharing will figure in selection processes and include information about the amount of cost sharing expected. Options should be drafted within twelve months of this report.
  • The NSTC will assess the impact of accounting practices on voluntary cost sharing by universities, particularly as it relates to the donation of faculty time to research projects. The review (including data collection) should be completed and recommendations issued within twelve months of this report.
  • The NSTC will assess the impact of provisions that limit reimbursement of research costs on otherwise allowable costs, and in particular, the impact of these cost reimbursement policies on government-university relationships that have procurement aspects. The review (including data collection) should be completed and recommendations issued within twelve months of this report.

4. Grants Administration

Issue: Differences in policy and practice across Federal agencies oblige institutions of higher education to maintain separate internal operating procedures for each agency with which they conduct business. Programmatic variations among agencies may justify some of these differences. However, opportunities to streamline excessive requirements could save time and resources for universities as well as for Federal agencies.

Discussion: More uniform policies and procedures for the administration of Federal research project grants can reduce paperwork and free faculty to spend more time on research. The Federal Demonstration Partnership (FDP) has developed standardized grant terms and conditions to apply to all FDP institutions that receive support from FDP agency members. These streamlined standards have helped reduce the burden placed upon researchers and university administrators by narrowing the differences in grants management practices among agencies, but without compromising accountability. However, not all agencies participate in the FDP, and only 65 universities are members. The benefits of streamlined standards and uniform terms and conditions could be extended to those other agencies and universities by making them applicable across all agencies. Agency efforts to reduce agency-specific requirements should also continue.

Broader adoption of standardized procedures should not hinder further streamlining by agencies. Prompted both by the promise of new technology and a desire to reinvent government for better performance, efficiency, and service, Federal agencies are developing a variety of new approaches to grants administration. One example is in the area of electronic research administration (ERA) where the Federal Commons now under development will provide universities a streamlined and consistent electronic interface with the Federal agencies. Another is the "modular grant" concept currently being studied by NIH, in which the investigator is asked to provide a best-estimate-of-cost for a proposed project in $25,000 increments, and which encourages subsequent disengagement from complex budget negotiations. Such agency streamlining efforts should be encouraged and accelerated.

ACTION: Reduce Differences in Grants Administration Across Agencies
  • The NSTC will establish an interagency group to develop terms and conditions that will reduce differences in grants administration policy and practice across Federal agencies to the extent consistent with individual agency needs. The general terms and conditions should be based on those developed by the FDP and make maximum use of the expanded authorities included in OMB Circular A-110 for all research and research-related project grants. Where consistent with statute, the NSTC policy will be that all Federal agencies will use the uniform terms and conditions as the default for all research and research-related project grants. These defaults should be overridden only when there are compelling reasons to do so. These actions should be implemented within twelve months of this report.
  • The NSTC encourages agencies to continue reducing agency-specific requirements, consistent with their missions. Related to this, agencies should work together to coordinate a "common face" to the university research community in the development of ERA systems.

5. Federally-Mandated Changes in University Business Practices

Issue: Universities have expressed serious concerns about the cumulative impact of Federally mandated requirements in business practices. For example, the implementation of Cost Accounting Standards (CAS) by the Cost Accounting Standards Board imposed administrative burden on universities, while provisions in OMB Circular A-21 place limits on the recovery of both administrative costs and other costs associated with operating the research enterprise.

Discussion: The implementation of CAS is an example of what can happen when Federally mandated business practices are implemented without consideration of their cumulative impact. In 1996, OMB incorporated the requirement to comply with four cost accounting standards in OMB Circular A-21, and, for institutions with Federally sponsored agreements totaling $25 million or more, the requirement to file a Disclosure Statement. The latter describes the cost accounting practices of the institution, and provides the cognizant Federal agency the ability to determine whether the institution is in compliance with the CAS.

The university community strongly opposed the implementation of CAS. Officials in both the university and government communities question whether CAS is appropriate given that universities often share in the costs of research, not only as a result of the administrative cap, but as a result of a variety of legislatively mandated cost sharing and other practices.

Taken in isolation, the CAS requirements reflect sound business practice. Yet questions about their efficacy are raised when they are considered in the larger context in which universities operate. For example, the costs of CAS implementation are recoverable under Federal contracts with commercial concerns, but they are not for universities (at least if their administrative costs are above the A-21 mandated cap on administrative costs.) There are other important differences between the treatment of commercial concerns and universities under CAS that should not be overlooked in the future when changes in accounting practices are proposed. In the commercial arena, adjustments are made in contracts when cost recovery is affected by government changes in cost accounting. For universities, however, where the government favors multi-year F&A rates, changes in recovery can only be made at the time the new F&A rate is renegotiated. More importantly, Federal sponsoring agencies rarely increase the overall value of sponsored agreements to accommodate increases in F&A rates.

ACTION: Establish Mechanism to Review Impact of Proposed Changes in Business Practices
  • The NSTC will consider the establishment of more effective mechanisms for reviewing government business policies and practices, both current and prospective, with respect to sponsored research to consider their relationship to each other, assess their impact on research, and determine their compatibility with university processes.

6. Regulation of Research

The review identified two areas where regulatory and administrative reform should be considered: the system of certifications and assurances by which universities demonstrate compliance with applicable national policies, and mechanisms for ensuring good environmental stewardship.

Certifications and Assurances

Issue: Certifications and assurances are used by agencies to obtain institutional and individual agreement to comply with the relevant national policy requirements. The two mechanisms are implemented and enforced differently, creating administrative complexity, yet a single mechanism might suffice.

Discussion: Universities are subject to many national policy requirements by virtue of receiving Federal grants and contracts. The requirements originate in approximately thirty statutes, Executive Orders, treaties and conventions, and are often further delineated in implementing regulations. Examples of current requirements are those concerning nondiscrimination on the basis of race, color, national origin, religion, sex, age, or handicap; the treatment of live organisms, including humans and animals; and environmental quality.

Awardees provide assurances to Federal agencies of their compliance with applicable national policy requirements by their acknowledgment of the terms and conditions of the award. Failure to comply can result in suspension of further payments by the agency under the award or termination of the entire award, if necessary.

For a few national policy requirements, agencies are required by statute or government wide regulation to obtain a certification, which is a signed declaration testifying to the recipient’s compliance with a national policy requirement. Institutions become liable for criminal penalties by virtue of certifying compliance with a national policy requirement, even if the failure to comply with the national policy itself is not subject to such penalties; these are more severe penalties than the penalties associated with failure to comply with assurances. Only three national policies mandate the use of certifications by statute or government-wide regulation. These are associated with the requirements of the Drug-Free Workplace Act; debarment and suspension rules; and the prohibition against the use of Federal funds for lobbying as required by law (31 U.S.C. 1352).

The three national policies for which certifications are required are as important, but do not appear to be more important, than the national policy requirements Federal agencies address using assurances. Replacing these certifications with assurances would reduce administrative complexity and paperwork for both Federal agencies and awardees and facilitate the use of electronic research administration. Relying on assurances would remove disparities in the penalties associated with certifications and assurances.

In addition to the question discussed above, whether assurances can be used in lieu of certifications for the few national policies that currently require certifications, there is a second question: can certifications and assurances be handled more efficiently on an institutional basis, rather than separately for each individual Federal award? Universities and other research performers comply with most national policy requirements for which certifications and assurances are required through institution-wide policies, procedures, and internal controls, rather than by taking actions specific to each award. Obtaining awardees’ commitments on an institutional basis, rather than requesting the identical commitment each time a potential awardee submits a proposal, would reduce paperwork for Federal agencies, universities, and other awardees, especially since only a fraction of the proposals or applications are selected for awards.


ACTION: Streamline Certification and Assurances Requirements
  • The NSTC will identify the appropriate agencies to conduct review of certification requirements in order to: determine those which might be replaced by certifications or assurances of compliance with national policies; identify those for which institutional assurances might be more appropriate (via electronic means if possible) than grant-by grant assurances; prepare a policy, for incorporation into the appropriate government-wide document, that directs agencies to impose agency-specific certification requirements only when required by law or if the agency head determines that there is added value that justifies using certifications rather than assurances; recommend necessary changes (including possible legislative changes) in current certification requirements. This action may implicate more than universities and the agencies that fund them, and appropriate government entities will be consulted as appropriate. The results of the review and recommendations should be issued within twelve months of this report.

Promoting Excellent Science and Environmental Stewardship

Issue: Over the past few decades the Federal government has established national environmental standards applicable to all sectors of the U.S. economy. Some research laboratories and industrial firms have developed tailored, laboratory-based environmental and safety management systems that sometimes exceed the relevant state and Federal levels of protection required by law, even resulting in lower cost, improved research productivity, improved employee safety and health, and better protection for the environment. Implicit in this approach is the recognition that ensuring safety and environmental protection is not just a matter of compliance with regulations, but is consistent with "doing good science."

Discussion: Recent environmental, health and safety incidents at U.S. research laboratories remind the scientific community that excellent science must also be safe science. Safety and environmental protection measures must be integral to research activities; every scientist and engineer is responsible for designing such measures into their research and for ensuring that students working with them are educated and protected about the risks involved in working in a laboratory. Scientists, engineers, and research laboratories funded by the government should strive to be exemplary in this regard.

Many industrial firms have adopted environmental standards that are more stringent than state and Federal environmental regulations, with research laboratories following suit, adopting protocols that are tailored to the working practices of their individual organizations and that ensure that relevant regulations are met. Examples include the adoption of "microscale chemistry" techniques that can reduce the quantity of resources needed and waste generated by an order of magnitude or more. By basing decisions and operating procedures on the full life-cycle cost, these laboratories have been able to create a research environment that improves worker safety and stretches limited research dollars by greatly reducing the need to dispose of and remediate wastes.

The Federal government recently has instituted a number of pilot programs that enable compliance with various environmental rules and regulations through a more flexible, tailored, and systemic approach that targets waste reduction, safety, and environmental protection rather than specific regulations, one by one. Such programs are a step in the right direction, but they will only reach their full potential when they are expanded and when a streamlined application process is instituted for them. Moreover, the Federal government needs to do more to incorporate the lessons learned from these experiments into new and revised Federal environmental regulations, which would lead to the creation of more responsive, tailored, and effective programs for environmental, health, and safety management systems.

This issue has been analyzed by a number of organizations, including the

Government-University-Industry Research Roundtable, which convened a meeting on the subject in 1991 of health and safety officers from university, industry, and government laboratories. The Roundtable concluded that means of improving waste-handling methods for research laboratories should be investigated that would reduce the volume of waste, eliminate nonproductive requirements, increase awareness about the importance of proper waste management, and enhance communication among all relevant parties. The NSTC considers this an important issue and believes that the establishment of an ongoing dialogue between research performers, state and Federal regulators, and the Federal agencies that support scientific research would be a productive way to disseminate these best practices and to identify any barriers to the adoption of these best practices. Any barriers that are the result of Federal environmental laws should be documented and resolved as these Federal laws come up for their periodic renewal.

ACTION: Strengthen Environmental Protection in Research Laboratory Setting
  • After consulting with the appropriate agencies, the NSTC will determine the best way to organize discussion among the nation’s universities, Federal and industrial research laboratories, Federal and state regulators, and Federal science agencies to identify best practices for integrating environment, safety, and health responsibilities with the conduct of research. This discussion would serve as a forum for disseminating best practices to a wider community. It would also serve as a forum for identifying lessons learned and impediments to the adoption of these practices that should be incorporated into new and revised Federal and state regulations. This forum should be established within twelve months of the issuance of this report, and annual progress reports should be produced, demonstrating progress.

Previous Page

Top of Page

Next Page