Dept. of Defense Indirect Cost Memo - More Details

This message was sent to MRAM, please see companion message sent to PIs on 6/16/2025. 

Greetings, 

On Friday, June 12th, the Dept. of Defense (DoD) issued a memo to senior DoD leadership implementing their 15% Indirect Cost (IDC) rate cap. We anticipate legal challenges to this IDC cap policy. 

Please see information on handling at each stage: 

Proposals

DoD will begin updating its Notice of Funding Opportunities (NOFOs) to include the 15% IDC cap. In addition, some DoD components may informally request proposals using the 15% rate before NOFOs are updated. UW will not be submitting with use of a 15% cap. 

If a DoD NOFO or other request for proposal does not impose the 15% IDC cap, UW may proceed with submission using our federally negotiated rate. 

New Awards

Should DoD impose the 15% within newly issued awards, UW will hold on processing at this time. If a DoD award does not include the cap, UW will process. 

Active Awards and Rebudgeting:

DoD has indicated it will “renegotiate” IDC on existing DoD assistance awards, to be effective no later than November 10, 2025. In some cases, DoD may begin this renegotiation sooner. If requested to submit using the 15% cap on any already submitted proposal or active award, please notify the Office of Sponsored Programs (OSP) at osp@uw.edu, for awareness. Similar to new proposals, the UW is not using the 15% cap as we anticipate a challenge to the cap policy. 

Review  UW FAQs on the DoD IDC cap 

Thank you, 
The Office of Sponsored Programs