A message from President Tim Sands

To the university community,

Last Friday, the National Institutes of Health (NIH) reduced the reimbursement it provides to research grant recipients to cover facilities and administrative (F&A) research costs, also known as indirect costs or “overhead." These costs are very real and include regulatory compliance required by the federal government (e.g., safeguarding human subjects); the costs to build, operate, and maintain research facilities; and the administrative costs required to manage the grants and contracts.

The NIH decision could have a $13 million impact on Virginia Tech’s annual research budget and would have a debilitating effect on the ability of research universities to carry out their mission. Lives will be lost due to the corresponding reduction in the pace of biomedical research. It will degrade the nation’s ability to compete in a global technology environment, threaten our national security, and impact the economies of the states and localities that host these institutions. If this F&A reimbursement reduction is extended to all federal agencies, the negative impact on our university would be over $55 million annually.

In fiscal year 2024, Virginia Tech’s total federally sponsored research expenditures exceeded $308 million. This includes direct expenditures of $235 million and F&A reimbursement of $73 million. An additional $18 million in unreimbursed indirect expenses for federally funded projects was funded by the university through other sources, reflecting the priority of our research mission as a public good, generating impactful knowledge, and training the next generation of scientists and engineers.

As I shared in last week’s State of the University Address, Virginia Tech’s research centers, interdisciplinary institutes, and innovation sites have positioned us at the forefront of academic and technical advancement. Our health science and technology research brings great value to the commonwealth that can be measured in lives saved, improved health, and economic growth in the communities we serve and beyond.

We are following the situation closely and reaching out to our congressional representatives in Washington, D.C., to express our deep concern about this decision and its potential effect on our university and our nation’s long-term viability as a science and technology leader.

We will continue to advocate for the value and importance of our research mission and make the strongest possible case for reconsideration or revision of this decision.

Additional information for principal investigators and others involved in our research enterprise will be forthcoming. Please continue to visit our Federal Agency Update page for the latest information.

Tim Sands,
President