The Office of Management and Budget (OMB) has proposed sweeping revisions to the regulations governing federal grants and research awards, a move that experts at the Special Competitive Studies Project (SCSP) warn could weaken the research enterprise underpinning American technology leadership. In formal comments filed with OMB, SCSP urges the agency to reconsider key provisions before finalizing the rule.
Ylli Bajraktari, president of SCSP, acknowledges that accountability for taxpayer dollars is essential and supports OMB's stated goals of transparency, research integrity, and stewardship. However, he cautions that 'political accountability and scientific expertise are not enemies. But applied without clear limits, the rule risks damaging the innovation engine that has been the backbone of America's scientific success.'
The proposed regulations contain several concerning provisions. Senior political appointees would review every discretionary award, reviewers would be directed to weigh presidential policy priorities, peer review would be explicitly downgraded to 'advisory,' and agencies could terminate active research awards simply because priorities changed after the work began. These changes, Bajraktari argues, could undermine the merit-based, stable funding environment that has driven U.S. scientific leadership.
The stakes are measurable. According to SCSP's 2026 Tech Competition Scorecard, China holds a decisive overall lead in robotics for advanced manufacturing, and the narrow U.S. lead in quantum computing is eroding under Beijing's coordinated, state-backed strategy. Meanwhile, the federally funded share of national research and development dropped by nearly one-third between 2010 and 2019, and federal AI research spending remains far below the $32 billion annual level recommended by the National Security Commission on Artificial Intelligence. 'America already faces a funding gap,' Bajraktari said, 'and should not compound it with a confidence gap.'
The proposed changes take cues from a termination-for-convenience model of government contracting, but research grants are different. A research grant supports multiyear experiments, doctoral researchers, and laboratory partners using custom equipment and generating data over time. Stopping that work midstream destroys value that reimbursement cannot recover. The losses also reach companies, investors, national labs, and startups that make decisions based on whether federally funded research is stable and merit-driven. 'When award decisions look political rather than technical, or when a grant can vanish because priorities shifted, private partners hedge, talent looks elsewhere, and the whole geometry of innovation weakens,' said Bajraktari.
SCSP's comments ask OMB to consider four points before finalizing any changes. First, keep merit at the center: scientific and technical merit, evaluated by qualified experts, should remain the primary basis for selecting research proposals. Senior appointees have a legitimate oversight role in compliance, security, and program fit, but should not substitute their judgment for expert evaluation of scientific quality, and any override should be documented in writing against published criteria. Second, make awards durable: competitively awarded research grants should not be terminable simply because policy priorities changed after the fact. Termination should be reserved for legal violations, security concerns, or performance failures, and recipients should have a chance to respond and wind down responsibly. Third, account for the private sector: before changing how research awards work, agencies should ask whether the change will deter co-investment, interrupt commercialization pathways, or push globally mobile talent toward America's competitors. Fourth, assess the competitive impact: OMB's own analysis counts only paperwork costs and calls them modest, but forgone discoveries and deterred capital are real national security costs even when they never appear as a line item. Major changes to federal research policy should come with a technology-competitiveness impact assessment.
SCSP also urged OMB to slow down. An October 1 effective date would impose new selection and termination frameworks on fiscal year 2027 awards before agencies have built the procedures to implement them well. For more information, visit SCSP's website.
