A federal judge in Boston today ordered the Department of Energy to keep paying the "indirect costs" it had already agreed to pay MIT and other schools for their research grants, rather than just slashing the payments on the general basis of "we wanna."
In her ruling, which extends an earlier temporary restraining order she had issued, US District Court Judge Allison Burroughs agreed with the argument by universities the sudden decision to simply roll back payments for lab building, support staff and other expenses to a maximum 15% was "arbitrary and capricious" and that's a no-no under the federal Administrative Procedures Act - which requires detailed explanations of any major program changes, such as modifying a payment plan that had been in place since 1965, so she ordered the regime to continue the payments as the schools' lawsuit proceeds.
Here, the Rate Cap Policy falls short. It provides no reasoned explanation for how or why the DOE concluded that indirect cost rates exceeding 15 percent do not constitute an appropriate or efficient use of DOE funds, nor does it explain how limiting funding for indirect costs would lead to that money being put to more appropriate and efficient uses. For instance, the Rate Cap Policy does not, as Defendants contend, explain that the money spent on indirect costs will be redirected to direct costs; it simply says that indirect costs are not direct.
That said, the Court would be remiss if it did not note that the Rate Cap Policy's lack of reasoned explanation is particularly troubling in light "of decades of industry reliance on [DOE's] prior policy" of accepting individually negotiated indirect cost rates ...
Burroughs, who noted a similar order by another Boston judge related to a similar payment slashing by the National Institutes of Health for medical research, rejected a request from regime lawyers that she order the schools to post a bond equal to the difference between the new maximum and what they had been making, just in case the government ultimately wins the case.