Johns Hopkins and UMD Sue DOD Over Research Funding Cuts

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Researchers at Johns Hopkins University and the University of Maryland discussing critical technology projects amidst funding challenges.

News Summary

Johns Hopkins University and the University of Maryland have filed a lawsuit against the U.S. Department of Defense over proposed cuts to research funding that could drastically reduce indirect cost rates. The DOD plans to cap these rates at 15%, potentially leading to significant financial losses for both institutions. The lawsuit, supported by multiple academic organizations, highlights concerns about impacts on critical research areas such as national security and technology, amid recent financial challenges faced by the universities. A temporary restraining order has been granted to halt the enforcement of these cuts pending legal proceedings.

Baltimore, MD – Johns Hopkins University (JHU) and the University of Maryland, College Park (UMD) have initiated a lawsuit against the U.S. Department of Defense (DOD) in response to proposed cuts to research funding. The lawsuit alleges that the DOD’s plan to drastically reduce indirect cost rates for research funding from the current rates of approximately 55-56% to a capped rate of 15% would severely impact their ability to conduct crucial research.

The DOD issued a memo on June 12, 2023, announcing the intent to limit indirect costs to 15%. These indirect costs are essential as they cover operational expenses linked to research activities, which include necessary expenditures like salaries for technical staff, electricity, and equipment. Currently, JHU operates with a negotiated indirect cost rate of 55%, while UMD enjoys a slightly higher rate of 56%.

Financially, the implications of these changes could be significant. JHU holds nearly 300 active DOD grants worth about $375 million. In the fiscal year 2024 alone, the university has received $122 million from the DOD, which breaks down to nearly $90 million for direct costs and around $32 million for indirect costs. The proposed cuts could potentially lead to an annual loss of approximately $22 million for JHU. UMD, which typically receives about $125 million from DOD awards each year, could face a potential funding decrease of approximately $7 million if the new caps are enforced.

The lawsuit is not an isolated effort; it is backed by 11 other academic institutions and various educational associations, including the Association of American Universities. This collective action indicates significant concern among universities regarding the DOD’s funding strategies and their implications for national research efforts.

The proposed funding cuts raise alarms about potential disruptions in critical national security research areas and emerging technologies, such as artificial intelligence and quantum computing. The ability of these institutions to contribute to essential research could be jeopardized if funding is limited in such a manner.

This legal action arises in the context of JHU’s recent experiences with funding challenges. The university has faced significant financial difficulties, including losing over $800 million from announced terminations of USAID grants and an additional $50 million from 90 canceled grants since the beginning of the year. To mitigate the impact of these financial uncertainties, JHU has announced a pause on pay increases and implemented spending reductions.

In a recent development, U.S. District Judge Brian E. Murphy granted the universities a temporary restraining order against the DOD’s new indirect cost cap, allowing for further legal proceedings to continue without the immediate enforcement of the DOD’s proposed changes.

As both JHU and UMD navigate these complex issues, the outcome of the lawsuit could significantly shape the future landscape of research funding in the United States, especially in areas deemed critical for national security and technological advancement.