Cornell University and the University of Rochester have joined a lawsuit against the Department of Energy and the DOE secretary, Chris Wright.
The lawsuit alleges that the DOE took "flagrantly unlawful actions" by "slashing 'indirect cost rates' for government-funded research."
8 comments:
Good luck. I don't this line of legal reasoning that the government must pay any price to any university or institution for grants will be successful.
15% may be too low but literally every faculty member I know has said the indirect costs are way too high and have been creeping up. It is also not clear that increased indirect costs have added much value. For example NSF grants are much harder to deal with in terms of paper work, and one argument is that with increased overheard we need to hire more people to administer NSF grants which makes it harder for the professor.
Not to mention that suppose Bill Gates said to a University I will give you 10 million dollars but only if you agree to 15% indirect, every single university would gladly take it and abide by the 15% (In fact this is where 15% comes from). Now make it the Federal government and suddenly the universities are "no no we will not take grants at 15% it will not work.
I good number might be closer to 20% or 25% at most not the 75% or more we see now. I suppose that we at the NNSA labs should not say anything with overhead rates of 300-400%. Of course NNSA labs do not have students paying tuition but our overheard rates are also too high.
From using AI I got the following information
From fiscal years 2000 to 2016, budgeted indirect costs on NSF awards ranged between 16% and 24% of the total annual award amounts, according to a Government Accountability Office (GAO) analysis.
The percentage generally increased since reaching a low point in 2010.
In 2024 Harvard was 70% UC campuses had their own negotiated indirect cost rates, which could range from 30% to 70%. For example, UC Santa Cruz had an on-campus research rate of 56% effective July 1, 2024
So in 2010 the rates were 19% and in 2024 the average 54%? There is clearly a big problem.
Perhaps if the universities found ways to convert themselves to for-profit entitities, they could list their stock on the stock exchange. The endowments could be used to buy back shares and pay dividends, and expansion would be financed by issueing more shares or debt rather than begging for further donationsm, although they could still try that. They could also issue crypto and stablecoin and get into the business of directly funding student loans, Obviously they would now be subject to taxation in some way but I am sure, the new corporate management would find many ways to monetize itself that would more than make up for that. Star researchers and managment could even be given stock options in the university itself, incentiving them to contribute for success.
Divisions of the university less suitable for a corporate environment of course, could be spun off so that private equity could maximize their value!
We could even go with an asset-lite model where the university would lease university buildings back from a REIT or private equity, naturally the shareholders of the university would receive this "buildings and grounds" REIT as a spinoff. There might be certain tax advantages in doing so, and many universities also own underdeveloped land as well which could be monetized too.
The new management team could be brought in perhaps, from some sort of consortium of contractors skilled at running large organizations -- perhaps defense contractors or even non-profit universities could be paid a fee to help the university operate.
LLNL does not issue grants.
LLNL does not issue grants.
What is your point? Could you elaborate because the 15% overhead rate is relevant for LLNL.
LLNL receives DOE and Office of Science grants and if DOE said the overheard rates are 15% it would have abide.
“LLNL does not issue grants”
LDRD
The LDRD overhead rate is like 300%
Post a Comment