Research University Presidents Oppose DOD Research Cost Cap

November 5, 2007 The Honorable Nancy Pelosi Office of the Speaker H-232, US Capitol Washington, DC 20515 Dear Madam Speaker: As the leaders of our nation’s top research universities and institutes, we write to express our strongest opposition to inclusion in the FY 2008 Defense Appropriations bill of an arbitrary cap on the reimbursement of facilities and administrative (F&A) costs to universities for research they conduct on behalf of the Department of Defense (DOD). The inclusion of an arbitrary cap set at any level would effectively circumvent existing OMB requirements for fair and equitable reimbursement of real and necessary costs our universities incur when performing research on behalf of the federal government. Reimbursement of such costs is already limited by rates negotiated in accordance with strict OMB rules. These indirect cost reimbursements are audited rigorously and negotiated regularly by federal agencies to ensure that taxpayer dollars are appropriately spent. Universities do not make a profit from such payments. The payments reimburse actual costs incurred and often do not cover all those costs. To the extent costs are not reimbursed, universities must use other revenue sources to pay for them. If Congress makes it more costly for universities to conduct research by implementing such an arbitrary cap, it will create a major disincentive for universities to conduct DOD research. This would disrupt a relationship that has been extraordinarily productive for our national security and our economy – a relationship that has produced such technologies as lasers, stealth technology, global positioning systems (GPS), night vision technology, and the Internet. While our universities oppose an arbitrary cap on indirect costs, we certainly understand that Congress might want to gain a better understanding of indirect costs and how they are reimbursed. We would welcome an independent review by the Government Accountability Office of the current OMB process by which university indirect costs rates are determined and reimbursed. Such a study would ensure that Congress is well informed before taking an action that could reduce DOD’s access to the best and brightest researchers from our universities for conducting research in support of our nation’s defense. Sincerely,

James W. Abbott President University of South Dakota

Michael F. Adams President The University of Georgia

Stan L. Albrecht President Utah State University

Robert A. Altenkirch President New Jersey Institute of Technology

John L. Anderson President Illinois Institute of Technology

William B. Applegate Interim President and Dean Wake Forest University Health Sciences

David B. Ashley President University of Nevada, Las Vegas

Guy H. Bailey Chancellor University of Missouri-Kansas City

Charles R Bantz Chancellor Indiana University-Purdue University Indianapolis

Gretchen M. Bataille President The University of North Texas

Donald L. Beggs President Wichita State University

Henry S. Bienen President Northwestern University

Robert J. Birgeneau Chancellor University of California, Berkeley

J. Michael Bishop Chancellor University of California, San Francisco

Gene Block Chancellor University of California, Los Angeles

George Blumenthal Chancellor University of California, Santa Cruz

Lee C. Bollinger President Columbia University

David L. Boren President The University of Oklahoma

Erskine B. Bowles President The University of North Carolina

Richard Broadhead President Duke University

William R. Brody President The Johns Hopkins University

Robert A. Brown President Boston University

Roger Brown Chancellor University of Tennessee at Chattanooga

Robert H. Bruininks President University of Minnesota, Twin Cities

Tom Buchanan President University of Wyoming

David Callender President University of Texas Medical Branch at Galveston

Nancy Cantor Chancellor and President Syracuse University

John F. Carney, III Chancellor University of Missouri-Rolla

Robert L. Carothers President The University of Rhode Island

John T. Casteen President University of Virginia

Jean-Lou Chameau President California Institute of Technology

David L. Chicoine President South Dakota State University

Francisco G. Cigarroa President University of Texas Health Science Center at San Antonio

Wayne Clough President Georgia Institute of Technology

Jared L. Cohon President Carnegie Mellon University

Mary Sue Coleman President University of Michigan

Robert D. Coombe Chancellor University of Denver

France Cordova President Purdue University

Denis Cortese President and CEO Mayo Clinic

Scott S. Cowen President Tulane University

Loren Crabtree Chancellor University of Tennessee

Michael M. Crow President Arizona State University

Eddie J. Davis Interim President Texas A&M University

Brady J. Deaton Chancellor University of Missouri-Columbia

Lois B. DeFleur President Binghamton University

George Dennison President The University of Montana

Michael V. Drake Chancellor University of California, Irvine

Philip Dubois Chancellor University of North Carolina at Charlotte

Robert C. Dynes President University of California

Mark A. Emmert President University of Washington

Drew Gilpin Faust President Harvard University

Elson S. Floyd President Washington State University

Daniel M. Fogel President University of Vermont

Marye Anne Fox Chancellor University of California, San Diego

David B. Frohnmayer President University of Oregon

Geoffrey Gamble President Montana State University

Mike Garrison President West Virginia University

Alice P. Gast President Lehigh University

E. Gordon Gee President The Ohio State University

Gregory L. Geoffroy President Iowa State University

Thomas F. George Chancellor University of Missouri-St. Louis

Jay Gogue President Auburn University

Raymond S. Greenberg President Medical University of South Carolina

Robert D. Grey Acting Chancellor University of California Riverside

Amy Gutmann President University of Pennsylvania

Mark Hamilton President University of Alaska

Patrick T. Harker President University of Delaware

Dianne F. Harrison President California State University, Monterey Bay

Robert E. Hemenway Chancellor The University of Kansas

John Hennessy President Stanford University

Richard Herman Chancellor University of Illinois at Urbana-Champaign

Virginia S. Hinshaw Chancellor University of Hawaii at Manoa

John C. Hitt President University of Central Florida

Susan Hockfield President Massachusetts Institute of Technology

Sung-Mo "Steve" Kang Chancellor University of California, Merced

Russel E. Kaufman President and Chief Executive Officer The Wistar Institute

Robert A. Kennedy President University of Maine

Shirley Kenny President Stony Brook University, The State University of New York

Charles Kupchella President University of North Dakota

Gordon H. Lamb Interim President University of Missouri System

David Leebron President Rice University

Lester Lefton President Kent State University

Richard C. Levin President Yale University

John V. Lombardi President Louisiana State University System

Bernie Machen President University of Florida

Carolyn R. Mahoney President Lincoln University of Missouri

Sylvia Manning Chancellor University of Illinois at Chicago

Sally Mason President The University of Iowa

Richard L. McCormick President Rutgers, The State University of New Jersey

Roderick J. McDavis President Ohio University

Michael A. McRobbie President Indiana University

John Mendelsohn President The University of Texas M. D. Anderson Cancer Center

Alan G. Merten President George Mason University

James B. Milliken President University of Nebraska

James Moeser Chancellor The University of North Carolina at Chapel Hill

C.D. Mote, Jr. President University of Maryland, College Park

Mark Nordenberg Chancellor University of Pittsburgh

James Oblinger Chancellor North Carolina State University

Carl Patton President Georgia State University

George Pernsteiner Chancellor Oregon University System

John Peters President Northern Illinois University

G.P. "Bud" Peterson Chancellor University of Colorado at Boulder

John Peterson President University of Tennessee, System

Malcolm Portera Chancellor University of Alabama System

William C. Powers, Jr. President The University of Texas at Austin

Daniel W. Rahn President Medical College of Georgia

Shirley Raines President University of Memphis

David J. Ramsay President University of Maryland Baltimore

Edward J. Ray President Oregon State University

Kevin Reilly President University of Wisconsin System

Jehuda Reinharz President Brandeis University

Daniel D. Reneau President Louisiana Tech University

Charles P. Ruch President South Dakota School of Mines and Technology

Roseanne O. Runte President Old Dominion University

Steven B. Sample President University of Southern California

R. Craig Schnell Provost North Dakota State University

Michael Schwartz President Cleveland State University

Joel Seligman President University of Rochester

John Sexton President New York University

Robert N. Shelton President University of Arizona

Ruth J. Simmons President Brown University

Lou Anna K. Simon President Michigan State University

John B. Simpson President University at Buffalo, The State University of New York

David Skorton President Cornell University

Barbara R. Snyder President Case Western Reserve University

Andrew A. Sorensen President University of South Carolina

Graham B. Spanier President The Pennsylvania State University

James D. Spaniolo President University of Texas at Arlington

Charles W. Steger President Virginia Tech

Shirley M. Tilghman President Princeton University

Lee Todd President University of Kentucky

Denise M. Trauth President Texas State University-San Marcos

Larry N. Vanderhoef Chancellor University of California, Davis

James W. Wagner President Emory University

Jon Wefald President Kansas State University

T.K. Wetherell President Florida State University

Kern Wildenthal President University of Texas Southwestern Medical Center

John D. Wiley Chancellor University of Wisconsin-Madison

Jack M. Wilson President The University of Massachusetts

Mark Wrighton Chancellor Washington University in St. Louis

Henry T. Yang Chancellor University of California, Santa Barbara

Michael K. Young President University of Utah

Mark G. Yudof Chancellor University of Texas System

Nicholas S. Zeppos Interim Chancellor and Provost Vanderbilt University

Robert J. Zimmer President The University of Chicago

Nancy L. Zimpher President University of Cincinnati

cc: Secretary of Defense Speaker of the House House Minority Leader House Appropriations Committee Chair and Ranking Member House Appropriations Subcommittee on Defense House Armed Services Committee Chair and Ranking Member Senate Majority Leader Senate Minority Leader Senate Appropriations Committee Chair and Ranking Member Senate Appropriations Subcommittee on Defense Senate Armed Services Committee Chair and Ranking Member