Recent legislation passed by Congress to cap overhead expenses on certain federal research grants has been met with strong opposition from Duke and other universities.
Although the cap will not have a drastic financial impact, administrators have spoken out against the precedent set by the provision.
The measure under question is part of broad legislation signed by President George W. Bush last month, which details funding for the Department of Defense for the 2008 fiscal year. The provision sets a 35-percent cap on overhead expenses for research grants provided by the Department of Defense. These "indirect costs" of research include laboratories, utilities and maintenance.
"This is a very uncomfortable cap for universities because of what it represents, not because the dollars lost are huge," said Graham Spanier, chair of the Association of American Universities and president of Pennsylvania State University. "If it is 35 [percent] now, then they might lower it to 20 [percent], or 10 [percent] or not have any overhead costs at all."
The legislation will also eventually have greater financial effects, he added.
"The cap simply shifts more funding responsibility to the university that they will have to pay for in some other way," Spanier said. "At most universities that would be from student tuition and other inappropriate sources."
Schools currently negotiate with the federal government on an individual basis to determine their overhead rates, and the 35-percent cap is close to the rate the University negotiated on its own this year, said James Siedow, Duke's vice provost for research and a professor of biology.
Opposition to the legislation is based on the fact that it replaces negotiation with an arbitrary cap, he added.
"The principle of the thing is what is driving our opposition, more so than the fact that we are going to lose a lot of money," he said. "We are actually going to lose very little money. It becomes a question of where the cap is."
It is not clear why Rep. John Murtha, D-Pa., proposed the measure after many years without a cap, said Chris Simmons, Duke's associate vice president for federal relations.
"The White House was opposed to this, the Office of Management and Budget was opposed to this," said Simmons. "Nobody really knows why he decided to do this."
Simmons added that he was unsure how the cap would affect Duke in the upcoming fiscal year, but the University would continue to voice its opposition to the cap through its membership in larger organizations like the AAU.
"The precedent of doing this at the Department of Defense really creates a nightmare and it is really bad public policy.... Everyone in the North Carolina congressional delegation knows that we are opposed to this legislation and we will be part of a national lobbying campaign to get rid of it," he said. "We are going to have to live with the 35 percent for a year, but I am hopeful that we will be able to change the law next year."
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