The Special Competitive Studies Project (SCSP), a nonprofit, nonpartisan initiative focused on U.S. competitiveness in emerging technologies, has filed formal comments with the Office of Management and Budget (OMB) urging revisions to proposed rule changes governing federal research grants. The experts argue that without limits, the new regulations could damage the innovation engine that underpins American technological leadership.
OMB has proposed the most sweeping revision in years to regulations governing federal grants and research awards. While SCSP supports the stated goals of transparency, research integrity, and stewardship, President Ylli Bajraktari wrote in a recent article 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."
Bajraktari highlighted 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. He emphasized that "accountability for taxpayer dollars is not optional," but the proposed changes could create a "confidence gap" on top of an existing funding gap.
The stakes are measurable. SCSP's 2026 Tech Competition Scorecard found that China holds a decisive overall lead in robotics for advanced manufacturing, and the narrow U.S. lead in quantum is eroding under Beijing's coordinated 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.
Bajraktari argued that 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 rely on the stability and merit-based nature of federal research funding. "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," he said.
SCSP's comments ask OMB to consider four key points before finalizing 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 should have oversight roles in compliance, security, and program fit, but should not substitute their judgment for expert evaluation of scientific quality. 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, with recipients given a chance to respond and wind down responsibly.
Third, account for the private sector. Agencies should assess whether changes will deter co-investment, interrupt commercialization pathways, or push globally mobile talent toward 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. Major changes should come with a technology-competitiveness impact assessment.
SCSP also urged OMB to slow down. An October 1 effective date would impose new frameworks on fiscal year 2027 awards before agencies have built procedures to implement them well. For more information, visit scsp.ai.
