The performers of research sponsored by the federal government operate under an increasing number and variety of administrative requirements. Examples include rules for human subjects, animal welfare, conflicts of interest, costing and administration, agency-specific requirements, and indirect costs. While each rule has its own history and justifications, the combination of often poorly coordinated requirements imposes a significant burden on research performers.

Two publications from the Office of Management and Budget (OMB)— Circular A-21, Cost Principles for Educational Institutions, and Circular A-110, Uniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations—form the framework for current cost and administrative regulations. Both are in need of revision. In 1999, the National Science and Technology Council (NSTC) released a report titled Renewing the Federal Government-University Research Partnership for the 21st Century, which laid out a set of guiding principles to provide a framework for the development of new policies, rules, regulations, and laws. These principles could be used to define acceptable standards for the conduct of research that could identify areas of deficiency and foster an appropriate balance between compliance with regulations and administrative flexibility.

A particularly contentious issue for college and university researcher performers has been the 26% cap on reimbursement of administrative costs imposed by the federal government in 1991.⁵ Currently, about a quarter of federal funds spent on research at universities reimburses indirect costs. The two major components of indirect costs are for the construction, maintenance, and operation of facilities used for research and for supporting administrative expenses, such as financial management, institutional review boards, and environment, health, and safety management.

As the administrative demands on universities have increased, these institutions have had to pay for an increasing percentage of indirect costs that are not covered under the 26% cap. As a result, universities have had to shift funds to cover administrative costs from other sources, including tuition, endowments, or state appropriations. Eventually, this cost shifting will be detrimental to the health of these institutions, resulting either in less research, higher tuitions, or reduced services to students.

A more flexible and responsive relationship between federal agencies and universities could help control the administrative costs of research. In 1986, the program now known as the Federal Demonstration Partnership