OMB Overhaul - Proposed changes to 2 CFR 200 and what research administrators need to Know

The Office of Management and Budget (OMB) has proposed significant updates to 2 CFR Part 200, commonly known as the Uniform Guidance. These rules govern how federal grants and cooperative agreements are awarded, managed, monitored, and closed out.

Although the changes are not yet final, research administrators should begin assessing how they could affect institutional policies, award management, budgeting, subrecipient monitoring, and compliance.

Stronger Government-Wide Authority

OMB proposes renaming Uniform Guidance to Uniform Grants Regulation. The change is intended to clarify that 2 CFR Part 200 functions as a government-wide regulation rather than optional guidance implemented separately by each federal agency. This could create more consistency across agencies, but it may also mean updated federal grant requirements take effect more quickly. Institutions should be ready for any change management that might be needed as a result.

Greater Federal Control Over Award Decisions

The proposal would give federal agencies and senior political appointees more involvement in discretionary award selections. Peer review and program staff recommendations may continue to inform funding decisions, but agencies could place greater emphasis on federal priorities and policy objectives when selecting awards. For research institutions, this raises questions about how scientific merit, agency priorities, and national policy considerations will be balanced.

Expanded Suspension and Termination Authority

Federal agencies could receive broader authority to suspend or terminate awards when projects no longer align with agency priorities, program goals, or the national interest. The proposed rules would also require recipients to take reasonable steps to reduce costs and cancel financial commitments following a suspension or termination. Institutions should review their internal procedures for:

• Stopping award spending

• Managing personnel and vendor commitments

• Closing or modifying subawards

• Documenting termination costs

• Communicating quickly with principal investigators

  
  

Changes Affecting Common Research Costs

Several cost categories could face new restrictions. Conference attendance may require express agency approval in the award terms. Publication costs could generally require advance approval, including open-access and article-processing charges. Professional memberships may also require written approval, while subscriptions could become unallowable. These changes could significantly affect proposal budgets and post-award cost reviews, deteriorate relationships between researchers and professional societies (concferences) and publishers (publications), and create long queues of wait time to get prior approval from federal agencies.

Elimination of Fixed-Amount Awards

OMB proposes eliminating fixed-amount awards and fixed-amount subawards. Institutions using milestone-based agreements with community organizations, clinical sites, consultants, or international collaborators may need to transition to reimbursement based on actual costs. This could require more detailed invoicing, documentation, and subrecipient monitoring, resulting in greater administrative burden by needing additional oversight needed, in a field where administrators are already operating at 100%.

Increased Subaward Oversight

The proposed rule places additional emphasis on subaward transparency and reporting. Pass-through entities may need to confirm that reportable subawards are entered into SAM.gov within required timeframes. Institutions would also need to evaluate whether transactions with affiliates and related organizations should be classified as subawards or procurement contracts. Clear documentation and consistent classification procedures will be increasingly important.

Restrictions on Certain Foreign Collaborations

The proposal would establish government-wide restrictions on using federal funds for some collaborations involving covered foreign countries or entities. Research administrator may need to work more closely with research integrity, export control, legal, and compliance teams to evaluate international partnerships, travel, technical assistance, and indirect support.

What We Can Do Now

Because the rule is still proposed, institutions should avoid making major policy changes before a final rule is issued. However, now is a good time to evaluate potential areas of risk. Research administration teams should review:

• Award suspension and termination procedures

• Subaward reporting and monitoring practices

• International collaboration controls

• Conference and publication cost policies

• Payment and drawdown documentation

• Training needs for investigators and administrators

  
  

In Short

The proposed revisions to 2 CFR Part 200 could bring major changes across the entire federal award lifecycle. Research administrators will play an essential role in interpreting the final requirements, updating institutional procedures, training stakeholders, and helping investigators remain compliant. Institutions should continue monitoring the rulemaking process and prepare to respond once OMB issues its final decision.

This article is intended for informational purposes and does not constitute legal advice.