Approach to Federal Grantmaking Takes Worrisome Turn

On August 7, 2025, the Administration issued Executive Order 14332 – Improving Oversight of Federal Grantmaking - marking a fundamental shift in how competitive federal grants will be evaluated, awarded, and managed. Under its sweeping new structure, all discretionary grant announcements and awards must now be first vetted and approved by senior political appointees, effectively inserting political oversight at every level of the grantmaking process. 

One of the most significant changes is the demand that proposed grants must “demonstrably advance the President’s policy priorities”—a standard that introduces ideological litmus tests into what has traditionally been a merit-based system. Additionally, the new order instructs agencies to revise their grant agreements to include “termination for convenience” clauses, giving funding agencies the discretion to cancel existing grants if they no longer align with shifting policy goals or program priorities.  

Perhaps most disruptive is the directive to limit facilities and administrative (F&A) cost reimbursements—in effect, favoring institutions with lower indirect cost structures and potentially disadvantaging labs and universities that rely on these funds to support infrastructure, compliance, and essential administration.  

Moreover, the Executive Order explicitly outlaws the use of federal discretionary funding for certain topics, including programs based on racial preferences, challenges to the sex binary, immigration services, or what it classifies as “antiAmerican values”. 

Perhaps most critically for the research ecosystem, the EO effectively halts new grant announcements until compliance mechanisms are fully implemented. Coupled with the new authority granted to political appointees to terminate both future and existing grants at will, this poses a significant threat to the independence of scientific review and the continuity of funded projects. 

This EO reshapes federal funding in a way that could fundamentally constrain research innovation. By shifting control from peer reviewers to political appointees, the EO undermines the traditional meritocratic process and introduces uncertainty into grant timelines. 

• Scientific Independence at Risk - Experts warn that removing decisions from independent reviewers threatens the apolitical nature of science and may hinder progress in urgent fields like public health, climate research, and emergency preparedness. 

• Program Disruptions - Grants already awarded - some focused on diversity, vaccine hesitancy, or transgender health - have reportedly been canceled or frozen, leaving projects in limbo and consigning researchers to uncertainty. 

• Infrastructure Strain - Institutions with larger indirect cost rates - typically universities and major research centers - may face reduced reimbursements, eroding their ability to maintain labs, administrative support, and compliance infrastructure necessary for high-quality grants. 

• Broader Innovation Chilled - Allegations are mounting that politicizing grant priorities and tightening timing will slow cures, treatments, and critical breakthroughs - all at a time when scientific innovation is most needed. 

In summary, the August 7 EO represents a profound departure from the traditional, science-driven model of federal grantmaking. For MichBio and its partners, it underscores the urgency to advocate for research integrity, protect investigator-driven funding mechanisms, and ensure that Michigan researchers—and the life sciences sector broadly—continue to thrive.