The Special Competitive Studies Project (SCSP), a nonprofit, nonpartisan initiative focused on strengthening America's long-term competitiveness in emerging technologies, has raised alarms over proposed changes to federal research grant regulations. The Office of Management and Budget (OMB) has put forward the most sweeping revision in years to the rules governing federal grants and research awards, and SCSP has filed formal comments urging the agency to revise the rule before finalizing it.
Ylli Bajraktari, president of SCSP, acknowledged that accountability for taxpayer dollars is essential, stating in a recent article that the organization supports OMB's goals of transparency, research integrity, and stewardship. However, he cautioned that without clear limits, the rule risks damaging the innovation engine that has been central to American scientific success. “Political accountability and scientific expertise are not enemies,” he said, “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. According to Bajraktari, 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, he argues, would undermine the merit-based, stable nature of federal research funding.
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, 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. Bajraktari warned that America already faces a funding gap 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 fundamentally 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 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 have a legitimate oversight role in compliance, security, and program fit, but should not substitute their judgment for expert evaluation, 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; 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 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, but forgone discoveries and deterred capital are real national security costs, so 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 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.
