Hello, I’m Ylli Bajraktari, President of the Special Competitive Studies Project. This week, SCSP filed formal comments on OMB’s proposed rule overhauling how the federal government awards—and terminates—research grants. Here’s why we did, and what’s at stake.
Most rulemakings don’t make headlines. This one shouldn’t slip by unnoticed.
The Office of Management and Budget has proposed the most sweeping revision in years to the regulations governing federal grants and research awards. Buried in the administrative language are provisions that would fundamentally change how America funds science: 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.
Let me be clear about where I stand. Accountability for taxpayer dollars is not optional. Executive Branch officials are responsible for how federal funds are spent, and they should be. SCSP supports OMB’s goals of transparency, research integrity, and stewardship. Political accountability and scientific expertise are not enemies.
But this rule, applied without clear limits, risks damaging something we cannot afford to damage right now: the innovation engine that underpins American power.
We are in a competition, and the margins are thin.
At SCSP, we spend our days measuring where the United States actually stands against China in the technologies that will decide this century. The picture should concern everyone. Our 2026 Tech Competition Scorecard found that China holds a decisive overall lead in robotics for advanced manufacturing. In quantum, the United States is only slightly ahead — and that lead is eroding under Beijing’s coordinated, state-backed strategy. Meanwhile, the federally funded share of national R&D dropped by nearly one-third between 2010 and 2019, and federal AI R&D spending remains far below the $32 billion annual level the National Security Commission on Artificial Intelligence recommended.
That is the backdrop against which this rule should be judged. We already have a funding gap. We should not compound it with a confidence gap.
Science is not procurement.
The proposed rule borrows a termination-for-convenience model from government contracting. But a research grant is not a purchase order. It supports laboratory teams, doctoral researchers, unique data, custom equipment, and multiyear experiments. Terminate that work midstream and you don’t just stop a project—you destroy value that reimbursement cannot recover: people, data, momentum, and the private co-investment that rode alongside the federal dollar.
And that’s the piece Washington too often misses. Federal research policy doesn’t just affect universities. Companies, investors, national labs, and startups all make decisions based on whether federal programs are stable and merit-driven. Venture capital flows toward fields that federal research has validated and de-risked. 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. Our competitors, operating under long-term national strategies, do not have this problem.
What we told OMB.
Our comment makes four core recommendations:
1. 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—compliance, security, program fit—but they should not substitute their judgment for expert evaluation of scientific quality, and any override should be documented in writing against published criteria.
2. Make awards durable. Competitively awarded research grants should not be terminable simply because policy priorities changed after the fact. Reserve termination for real problems—legal violations, security concerns, performance failures—and give recipients a chance to respond and wind down responsibly.
3. 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 our competitors.
4. Assess the competitive impact. OMB’s own analysis of this rule counts only paperwork costs and calls them “modest.” It never asks the bigger question: what does this do to America’s position in the technology competition? Forgone discoveries and deterred capital are real national-security costs, even if they never show up as a line item. Major changes to federal research policy should come with a technology-competitiveness impact assessment.
We also urged OMB to slow down. An October 1 effective date—roughly 90 days after comments close—would impose new selection and termination frameworks on fiscal year 2027 awards before agencies have built the procedures to implement them well.
The real question.
The debate here is not whether the government should control taxpayer funds. It should. The question is whether the rules governing that control reinforce or undermine the ecosystem that made America the world’s leading scientific and technological power: technical excellence, merit-based evaluation, long-term inquiry, and productive connections among government, academia, industry, and capital.
China is aligning every instrument of national power around technology leadership. We should be strengthening our innovation base, not introducing uncertainty into it. OMB can achieve real accountability and preserve what works—but only if it revises this rule before finalizing it.
Our full comment is available here.
Explore How AI is Reshaping the Scientific Pipeline
Scientific breakthrough has historically been limited by the speed of human trial and error. Today, AI is fundamentally changing that equation by accelerating the R&D pipeline and running autonomous scientific agents to design and refine experiments.
To explore this shift, SCSP is hosting the AI+ Discovery Summit on July 21, 2026, in Washington, D.C.
The event is tailored for researchers, policymakers, and builders working at the intersection of deep tech and national competitiveness. Key themes include:
Machine Discovery: Models designed to accelerate breakthroughs.
Scientific Agents: Autonomous systems that can design, run, and refine search.
Science Infrastructure: Managing the massive compute, data, and talent demands of AI-driven research.
Speakers include directors and leads from Los Alamos and Oak Ridge National Laboratories, Commonwealth Fusion Systems, Convergent Research, and more. Space is limited, so register now before it’s too late!