Discontinuation of Recommended F&A Disclaimer Language

Recent federal appropriations actions have made the University's previously recommended F&A disclaimer language - developed in response to federal indirect cost cap policies - no longer necessary for any federal sponsors.

On January 27, 2026, the Department of Energy (DOE) issued Policy Flash 2026-30, formally rescinding all earlier DOE Policy Flashes that had imposed limitations on caps on indirect cost (F&A) recovery. DOE confirmed that, with the signing of H.R. 6938, the Commerce, Justice, Science; Energy and Water Development; and Interior and Environment Appropriations Act of 2026, the agency must apply negotiated indirect cost rates exactly as they were applied in FY2024, consistent with 2 CFR 200.414. The Act also prohibits DOE from developing or implementing any changes to those negotiated rates.

Congressional appropriations language extends beyond DOE. The same legislation prohibits multiple federal agencies - including Commerce, NASA, and NSF - from applying or developing indirect cost rate caps, reinforcing the requirement that agencies honor federally negotiated F&A rates.

Because the prior environment of agency-imposed indirect cost caps has been superseded by federal law requiring agencies to apply negotiated rates, the University will no longer require the inclusion of the previously recommended F&A justification statement in proposal budget narratives.

For reference, the previously recommended statement was :

The University of Utah is aware of [sponsors cap]. To the maximum extent permitted by applicable law, the University of Utah is submitting this application and budget using the indirect rates agreed upon for “grants, contracts and other agreements with the Federal Government” as set forth in that certain Colleges and Universities Rate Agreement, by and between the University of Utah and the Department of Health and Human Services, dated effective as of December 16th, 2021 (the “Rate Agreement”).  Any adjustments to the indirect rates set forth in the Rate Agreement shall only be made to the extent required under applicable law at the time of award.

Moving forward, standard negotiated F&A rates may again be used in federal applications without additional qualifying language, unless a sponsor-specific statutory cap applies.