New OMB Proposed Rule: What Federal Funding Recipients Need to Know
A sweeping proposed rule from the Office of Management and Budget (OMB) could significantly change how federal grants and cooperative agreements are administered and would affect any organization that receives federal financial assistance, including universities, nonprofits, state and local agencies, and research organizations.
Published in the Federal Register on May 29, the proposed revisions touch nearly every stage of the grant lifecycle. Here are the key provisions to know:
Political appointee review of all discretionary grants: Agency political appointees would be required to conduct pre-award reviews of every discretionary grant and explicitly cannot defer to peer reviewers.
Mid-award termination without cause: Active grants can be terminated at any time if deemed "inconsistent with program goals or agency priorities," with only a brief written rationale required - no finding of noncompliance needed.
Public communications and outreach severely restricted: All public relations costs would be unallowable except those explicitly required by statute. This would restrict researchers from communicating findings to the public or press using federal funds.
Issue advocacy prohibited: A related "issue advocacy" prohibition would bar use of grant funds for messaging that promotes or opposes "a particular social, political, or public policy position." Together, these two provisions add significant layers of control over how federally funded science reaches the public.
Publication costs disallowed by default: Article processing charges and open access fees would be unallowable unless agencies grant case-by-case pre-approval.
Conference attendance requires pre-approval: Attendance at conferences using grant funds would require express agency approval written into the award at the time of issuance.
Professional society memberships require prior approval: Memberships would need to be shown as "necessary to fulfill the award requirements."
Restrictions on international collaboration: Use of federal funds for work involving entities in certain foreign countries would be prohibited, extending beyond existing restrictions.
The comment period closes July 13, 2026.
Has your organization started reviewing this rule? Share your reactions and questions in the comments below.
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Mark Mather
Associate VP
PRB
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