What the Proposed OMB Regulation on Federal Financial Assistance Means for Education Researchers

Background

On May 29, the Federal Register published a proposal advanced by the White House Office of Management and Budget (OMB) on a Regulation for Federal Financial Assistance. This proposed regulation would further codify and update “Uniform Guidance” that governs the grantmaking process across federal agencies.

OMB is advancing this proposal to align practices for federal grantmaking across agencies to implement several Trump administration Executive Orders that include:

• Improving Oversight of Federal Grantmaking
• Restoring Gold Standard Science
• Restoring Equality of Opportunity and Meritocracy
• Ending Radical and Wasteful Government DEI Programs and Preferencing

This proposed rule would make extensive updates to the federal grantmaking process and would have significant impact on the work of education researchers. The proposed rule would take effect on October 1. A 45-day comment period is currently open through July 13.

This summary analyzes provisions of the proposed rule that would affect the scientific research and education activities undertaken by AERA members. In addition to federally funded research, this rule would apply to any activities supported with federal funding.

Section-by-Section Summary

200.202 – Program Planning and Design

• Federal agencies that advance research and development would be required to apply a “domestic-first framework,” under which an international “element” could only be included if justified and deemed to be in national interest
• Encourages federal agencies to fund multi-year awards
• Would require federal agencies to classify scientific research as basic, allied, or experimental development to align with OMB Circular A-11

200.205 - Federal Agency Merit Review of Proposals

• In addition to merit review process required under current guidance, proposals would be subject to review by a designated senior appointee at the federal agency before an award is made. The review would assess whether the proposal meets principles that include:
  • Advancing the president’s policy principles
  • Not being used to “fund, promote, encourage, subsidize, or facilitate” racial preferences, “denial of the sex binary,” or illegal immigration
• Agencies would be encouraged to provide federal grants to a broad range of recipients likely to produce “immediately demonstrable results” and “longer-term, breakthrough results.”
• Applicants for federal research grants would need to commit to Gold Standard Science and include benchmarks toward meeting the principles of Gold Standard Science.
• Agencies would need to prioritize “commitment to rigorous, reproducible scholarship over its historical reputation” as well as take into account institutional “success” in Gold Standard Science.

In sum, this section would create a strong preference for the types of research that would be supported under the proposed rule through application of the administration’s Gold Standard Science principles. The political appointee review would also supersede program officer recommendations and subject-matter expertise in the evaluation of scientific research proposals. In addition, with the parameters of the political appointee review, this would potentially limit research that would examine impacts of programs by race or gender.

200.218 – Prohibition of Using Federal Awards to Promote or Support Theories of Disparate-Impact Liability

• Proposes definition of “disparate-impact liability”: “a Theory under which a facially neutral policy or practice (for example, a merit-based employment policy or practice) gives rise to an automatic or near-insurmountable presumption of the existence of unlawful discrimination on the basis of federally protected characteristics (such as race or sex) where there are any differences or disparities in outcomes (for example, disproportionate effects) among different races, sexes, or similar groups. Under a theory of disparate-impact liability, this presumption would apply even if there is no facially discriminatory policy or practice, there is no discriminatory intent involved, and equal opportunity is provided. Discriminatory intent is irrelevant in a disparate-impact claim. Disparate-impact liability effectively mandates consideration of federally protected characteristics, such as race or sex, and incentivizes racial balancing, contrary to principles of equal treatment and merit-based opportunity.”
• Prohibits the use of federal awards to support theories of “disparate-impact liability,” including “disparate-impact studies.”
• Although the proposal notes that federal grant recipients would not be prohibited from “conducting statistical or demographic analysis for internal program evaluation, research, or other purposes,” federal funds could not be used for such analyses nor could the results be used to inform activities supported by the federal award.

200.220 – Prohibition of Using Federal Funds for Covered Foreign Collaborations

• Would prohibit federal funding from being used for multilateral collaborations or activities that include a covered foreign country or covered foreign entity, as defined in the proposed rule (foreign adversary; country of particular concern; country subject to sanctions or restrictions relating to national security, defense, or intelligence activities). This would include research activities funded through federal agencies.

 200.300 – Statutory and National Policy Requirements

• The proposed rule would require federal agencies to ensure that awards do not “fund, promote, encourage, subsidize, or facilitate” diversity, equity, inclusion, and accessibility” (DEIA) policies, principles, or practices; gender ideology; or gender-affirming practices for anyone under the age of 19.

200.329 – Monitoring and Reporting Program Performance

• Similar to proposed update for Section 200.202, would require recipients of federal research grants to identify and include the categorization provided in the terms and conditions of the award in the performance report.

200.340 – Termination / Suspension

• Current OMB Uniform Guidance allows termination “if an award no longer effectuates the program goals or agency priorities,” but only under the terms and conditions of the award and to the extent of the law.
• The proposed rule would go beyond current guidance to institute a “discretionary termination” category that would enable federal agencies to terminate an award if they determinethat a federal grant “does not effectuate program goals, Federal agency priorities, or the national interest as they exist at the time of the termination.”
• This aligns with language in the Improving Oversight of Federal Grantmaking Executive Order.
• Discretionary termination would be one of four grounds for termination, alongside noncompliance, mutual agreement of the parties, and notification by the grant recipient or subrecipient.

200.341 – Notification of Termination Requirement

• Federal agencies would be required to provide a brief summary of the reason(s) for finding that termination is in the interest of the Federal agency if a federal grant is terminated under the “discretionary termination” criterion.

200.342 – Opportunities to Object, Hearings, and Appeals

• Federal agencies would only be required to provide opportunities for hearings or appeals for termination for noncompliance. Thus, agencies would not be required to provide hearings or appeals for discretionary termination, similar to the NSF grant terminations that occurred last spring.

200.432 – Conferences

• Federal funding for attending conferences would only be allowed if included in the approved terms and conditions set by the federal agency. Under current guidance (and would be retained in final rule) “conference” is defined as “an event whose primary purpose is to disseminate technical information beyond the recipient or subrecipient and is necessary and reasonable for successful performance under the Federal award.”

200.461 – Publication and Printing Costs

• Updates to this section would prohibit the use of federal award fundsto pay article processing fees or other open access costs that facilitate public access to federally funded research. This proposal is advanced at the same time that OSTP’s Gold Standard Science framework emphasizes transparency and reproducibility, principles that depend on access to research publications and their underlying data.