Court Prevents NIH Research Award Indirect Cost Cap Policy
A federal appeals court on January 5, 2026, upheld a district court injunction preventing the National Institutes of Health (NIH) from implementing a policy that would have capped indirect cost rates at 15% of a research award’s value. The decision represents a significant win for the higher education and research advocacy community, which argued that the proposed cap disregarded established federal cost principles and threatened the financial sustainability of research infrastructure.
The appellate panel agreed that NIH’s policy conflicted with language in congressional appropriations law directing the agency to adhere to negotiated indirect cost agreements. That provision, renewed annually, prohibits agencies from making “significant deviations” from established rates without congressional authorization. The court’s ruling underscores the legal weight of appropriations directives in shaping administrative policy and reaffirms that major funding changes must go through formal rulemaking or legislative channels rather than unilateral administrative action.
The recent actions by Congress to protect indirect costs (also known as facilities and administrative, or F&A, costs) represent an important victory for the entire research community — including ACSM members whose work depends on stable federal research infrastructure. New fiscal year 2026 appropriations and related report language prevents federal agencies from unilaterally capping or reducing negotiated F&A rates and instead directs them to continue using existing rates while broader reforms are considered.
For many ACSM-affiliated investigators, indirect cost recovery is what keeps laboratories open, pays for research coordinators and statisticians, maintains data and compliance systems, and supports the institutional infrastructure needed to safely conduct clinical and community-based exercise science. A flat cap on indirect costs—such as the previously proposed 15% ceiling—would have stripped away these supports, threatening training pipelines, multi-site trials, and translation of physical activity research into practice.
Congress’s new language sends a clear signal: agencies should not use policy guidance or regulatory changes to sidestep negotiated rates, and any long-term changes to how research infrastructure is funded must be developed collaboratively with stakeholders.
ACSM will continue to advocate for a federal research funding system that fully recognizes the true costs of discovery and implementation—ensuring that the science of physical activity and exercise remains strong, credible, and capable of meeting public health challenges now and in the future.
Another Shutdown Deadline Approaches
Congress is once again staring down a funding deadline, and the outcome will shape federal support for public health and physical activity priorities in the months ahead. Congress must act by January 30 to prevent a new partial government shutdown, when the current stopgap funding measure—passed in November after a 43-day lapse—expires. Many agencies, including those that house physical activity and chronic disease prevention programs, are operating under flat, prior-year funding until lawmakers either complete full-year appropriations or approve another continuing resolution.
The House has already advanced a major spending package that would fully fund several departments through the rest of fiscal year 2026, and the Senate has begun moving a corresponding funding measure as the deadline nears. Appropriators are still negotiating the remaining bills—covering areas such as health, education, labor, and housing—where disagreements over spending levels and policy riders continue to slow progress.
For ACSM members, the most immediate impact of the current stalemate is uncertainty: key agencies that support surveillance, guidelines, and community-based prevention efforts remain constrained by temporary, status quo funding. If Congress fails to reach agreement by January 30, a partial shutdown could disrupt planning, delay new grants or contracts, and further strain federal partners working to advance physical activity and chronic disease prevention across the lifespan.
