Grant Accounting as Publishing Policy: OMB’s Proposed Rule Changes

Grant administration rules are not where most authors look for news that affects their work. But, the so-called “Uniform Guidance” published in Title 2 of the CFR has a big impact on how universities account for federal money, from what counts as an allowable cost to how indirect rates are negotiated. The rules about what a grant can pay for, though, are also rules about how publicly funded research gets published and read. 

On Friday, the Office of Management and Budget proposed revisions that would make sweeping changes to how and for what purposes grants can be used. 

Much of it is overtly partisan, and I’m not commenting on that here. What I’d like to draw your attention to instead are a few provisions that would have a direct impact on how authors’ research is published and made available to readers.   

The first addresses article processing charges, the fee that funds a large share of open access publishing; the proposed rule flips the default and treats APCs as unallowable except in narrow circumstances. The second is the cost of academic journal subscriptions, which universities have long folded into the indirect cost pool that supports their libraries. The proposed text appears to make those subscriptions unallowable as well, though, as explained below, it is far from clear that OMB means to reach institutional library spending. A separate provision, the federal purpose license in 2 CFR 200.315(b), is the legal mechanism agencies rely on to deposit grant-funded articles in public access repositories. It is left unchanged, which is also meaningful, though certain language in the proposed rule makes it unclear. 

How these line items are treated will shape the economics of scholarly communication more than their placement in a grants regulation suggests. Below is an attempt to state more clearly what these proposed changes would do (and what remains unclear). As you read these provisions, I’d encourage you to collect your thoughts and consider contributing them to OMB (comments are currently due July 13, 2026, though an extension has already been requested).

1) Looking first at the structure of the proposed rule, OMB seems to be taking a far more assertive role with respect to grant administration than it has in the past—it seems to be transforming the uniform “guidance” into uniform “rules.” Part B.2. of the proposed rule talks about clarifying the regulatory structure (I admit the existing structure is confusing!), by stating (a) that Title 2 of the CFR  is not merely “guidance” (as it presently clearly states) but is in fact a regulation that must be followed by other agencies, and (b)  that changes to Title 2 will promulgate automatically, not waiting for agencies to adopt them themselves. It includes a lengthy explanation of its authority to do this (e.g., “Congress authorized OMB at 31 U.S.C. 503 to set government-wide requirements for grants administration, and agencies must follow the OMB requirements in their award programs.” (emphasis mine)).  

Whether OMB actually has this authority to directly issue its guidelines as binding regulations may end up as a matter for the courts. Existing litigation around indirect cost rate caps and funding freezes set by agencies has only obliquely touched on it. ¹

Who knows how this will play out, but the result seems to be less agency variation (though the tail end of the rulemaking makes clear there will still be some), and a more directive approach from OMB.  

2) On APCs, the default rule is essentially flipped. Presently, grant administrators are permitted to charge Article Publication Charges from the grant funds; the proposed rule would make APCs (or “similar fees such as open access fees for professional journal publications and other peer-reviewed publications”) unallowable under Federal awards, except in two cases:  

(1) when a federal law requires otherwise, or 

(2) when they are approved by the agency on a case-by-case basis. 

Aside from APCs, the other allowed publication and printing costs (described in 2 C.F.R. § 200.461) are essentially left alone. Presently, publication costs are permitted when (1) they report on work supported by the Federal government; and (2) the charges are levied impartially;  and awardees may charge costs at closeout for costs incurred outside the period of performance.  The proposed rule keeps these rules, but restates them.

It seems to me the most important question under the new proposed rule is what does “case-by-case” mean? If it simply means that, where the particular agency decides to allow APCs in the first place, APCs as a category must be budgeted for and approved in the grant, then this doesn’t seem like a monumental shift for APCs paid by many research projects. If, however, it means something more onerous—e.g., prior approval on a publication-by-publication basis—then the rule would be so difficult to comply with as to effectively mean a prohibition on APC payments in all but the most extraordinary cases. 

Whatever “case by case” means, it seems to me that agencies would retain the ability to fund OA publications that are specifically considered for OA, e.g., as NEH has done by funding specific books to make them open access.

But, it also seems that, combined with the change to Sec. 200.454 (below), this new text could make it difficult for universities to include article processing charges or similar as part of bigger transformative agreements in their indirect cost calculation since such agreements aren’t amendable to case-by-case assessment and because they are typically funded as indirect cost rather than direct costs.

One more thing on APCs: the proposed rule aims to limit the allowability of APCs strictly based on the relevance to the program that makes the grants.  As the proposed rule explanatory text asserts, “In many cases, such activities are discretionary, vary widely in scope and costs, and may serve institutional, professional, or reputational interests rather than the specific objectives of the Federal program.”  But just how direct the relationship between paid-for open access and the grant program’s objectives must be remains unclear.

3) Spending on academic journal subscriptions is restricted (but we don’t know to what extent)

Presently, 2 CFR § 200.454 reads: “Costs of the recipient’s or subrecipient’s subscriptions to business, professional, and technical periodicals are allowable.”  The proposed new rule would make those costs unallowable, and would add academic periodicals as unallowable costs.

Read in isolation, this proposed rule change would represent a dramatic change in the types of costs that universities can charge against grants for subscriptions. For most universities, subscriptions to academic journal costs are largely included in the indirect cost pool, via amounts representative of library expenditures. This spending can be quite large – most major research libraries now spend the bulk of their collections budgets on electronic subscriptions, totaling in many cases millions of dollars per year. 

If the rule means subscriptions could not be used as part of the university’s indirect cost base, this would represent a major reworking of indirects for many universities (For more on the subject, we’ve written about indirects before, such as in this post last year) 

However, it’s not entirely clear that this is meant to apply to library subscriptions, as opposed to one-off subscriptions just for particular research projects. This is for a few reasons. 

First is the context in which it appears. This is a section that also disallows costs of things like country club and dining club memberships, all of which are the kinds of things providing narrow, individual benefits, while still specifically allowing memberships in professional, technical, and civic or community organizations—not the kinds of things that are used by the entire institution. The explanatory text for this section is spartan. OMB merely notes that “Under the proposal, all other costs, including the costs of subscriptions or memberships in country clubs or organizations whose primary purpose is lobbying or issue advocacy, are unallowable.” It’s not impossible that OMB means to also limit broader institutional subscriptions here, but the placement would be strange. 

Second, in the broader explanatory text OMB includes about the overall rulemaking, OMB include a lengthy discussion of the existing review of indirect cost rates, noting an extensive process for reviewing and changing indirect rates. This includes, OMB notes, legislation in the 2026 appropriations bills to essentially keep negotiated indirect rates static for now (OMB doesn’t mention all the recent litigation about indirect costs, but surely that is also part of the backdrop). Given the existing process, OMB states that the proposed rule does not change the negotiated indirect cost rate system, and that OMB will not consider comments on that subject. 

Taking OMB at its word, it would seem odd then to include, buried in this section, a prohibition on allowable journal subscription costs, ordinarily paid for through indirect cost rate pools, that would upend many universities’ negotiated indirect cost rates. If the intent or effect is to make such a large category of costs unallowable, that seems to me the kind of change that would be immediately challengeable in court as a violation of Congress’s direct instruction not to modify indirect cost rates in the most recent appropriations bills. 

4) The federal purpose license in 2 CFR 200.315(b) is unchanged. 

This is important because it is the primary legal provision by which federal agencies obtain the necessary licenses from authors and universities to publish research articles, allowing them to share results freely via public-access repositories. We’ve written extensively about how this license system works and what its limits are here. 

We do observe that the new proposed rule would update 2 CFR 2900.13, which references the CFR section where the federal purpose license is located (sort of; see below). The new proposed text provides that “In addition to the regulation set forth in 2 CFR 200.315(d),” (emphasis mine) the Department of Labor (and only the DOL) requires intellectual property produced under discretionary awards to be openly licensed.  

However, this isn’t a meaningful change from the Department of Labor.. The update is merely to conform to the overall new structure OMB is proposing, changing “guidance” in the existing version to “regulation” in this new version.  As Eric Harbeson explains in his paper “Open Access and Federal Information Policy” (p. 20) DOL has had this exact same open licensing language in place for some time, at least since 2021, and the Dept of Ed has similar open licensing requirements.²

1. Compare Ass’n Of American Univ. v. Nat’l Science Found., 788 F. Supp. 3d 106, 131  (D. Mass 2025) (“to the extent Plaintiffs argue further that NSF is statutorily barred from imposing any across-the-board cap on indirect cost rates, the court declines to resolve the issue where the parties have not addressed whether 31 U.S.C. § 503 vests exclusive authority in OMB to establish policies regarding reimbursement of indirect research costs in federal grant awards,”) with National Council of Nonprofits v. Office Of Mgmt., 775 F. Supp. 3d 100, 126 (D. Mass. 2025). (“DOD’s authority to issue grants is limited by OMB regulations governing the administration of those grants. See 10 U.S.C. § 4001(b)(1) (permitting issuance of grants “in accordance with chapter 63 of title 31,” 31 U.S.C. § 6301 et seq.); see also 31 U.S.C. § 503(a) (granting OMB authority to “establish governmentwide financial management policies for executive agencies”)). In cases involving a blanket funding freezes, the courts have interpreted this provision to say that OMB has an oversight role, but not more. See National Council Of Nonprofits v. Office Of Mgmt., 775 F. Supp. 3d 100, 126 (D.D.C. 2025) (“the structure and provisions of Section 503 strongly suggest that OMB occupies an oversight role. Defendants have not pointed to specific authority that allows it to unilaterally pull the plug on nearly all federal monetary flows.”). ↩︎
2. For those really into the details, note this minor oddity: the citation to § 200.315(d) rather than to the whole of § 200.315 is perplexing. Section 200.315 as a whole addresses rights in intangible property. Section  200.315(b) contains the “Federal Purpose License” that supports public access to scholarship. Section 200.315(d), however, applies only to the reuse of data. It provides that  “The Federal Government has the right to:(1) Obtain, reproduce, publish, or otherwise use the data produced under a Federal award; and (2) Authorize others to receive, reproduce, publish, or otherwise use the data for Federal purposes.” As Eric notes in his 2024 article: “It is possible this is intended to supplement only the provision of Sec. 200.315(d), which applies to data supporting works, not to final products; however, by its plain language Sec. 2900.13 applies to all intellectual property produced under DOL grants, so it is most sensible to interpret the section as applying as a supplement to 200.315(b).”
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