McCarter & English – On December 18, 2025, the Fiscal Year 2026 National Defense Authorization Act (FY26 NDAA) became law. True to form, each year’s NDAA is a sprawling piece of legislation, and the FY26 NDAA includes many priorities of the current Administration. Nestled among its myriad provisions, federal grant recipients should take note of Section 230, the “Prohibition on Modification of Indirect Cost Rates for Institutions of Higher Education and Nonprofit Organization.” This section serves as a speed bump for rapid changes to indirect cost rates for Department of Defense grantees and reflects congressional sympathy for grantee concerns, particularly those of institutes of higher education (IHEs).
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