Comment on OMB-2026-0034-0001

Re: OMB-2026-0034, Regulation for Federal Financial Assistance (RIN 0348-AB88) To the Office of Management and Budget: The Institute for Clinical Research, Inc. (ICR) submits this comment as a VA-affiliated nonprofit corporation (NPC) supporting veteran-focused research and education in the Washington, D.C. community. NPCs were created by Congress specifically to support VA research, they operate inside federal medical centers and are NOT comparable to universities, which have massive financial buffers. ICR currently oversees the conduct of approximately 35 Pharma studies and 10 non-VA funded federal studies and subcontracts, ranging from prostate cancer and lung cancer to chronic kidney disease and cirrhosis, all of which adversely affect Veterans. [§ 200.101] ICR is concerned that the proposed rule exceeds the executive branch’s statutory role in federal grantmaking. For decades, 2 CFR has functioned as government-wide guidance implemented through agency-specific policy, preserving transparency, public input, and alignment with agency missions. Converting this framework into a single binding authority would allow broad changes across agencies through one rulemaking process and could shift decisions affecting American scientific discovery toward non-scientific priorities. That instability would weaken the collaborative framework that supports federally funded research and erode public trust in long-term federal research commitments. We ask that OMB maintain agency-level notice and comment for 2 CFR, rather than bind all agencies through a single rule. [§ 200.340] The proposed rule would create significant instability for multi-year research programs that Veterans rely on for continued advances in care. By allowing agencies to suspend or terminate awards mid-performance if they no longer align with agency priorities (§ 200.340), the rule threatens the continuity and scientific integrity of longitudinal and clinical research requiring years of sustained support. For VA-affiliated nonprofits like ours, abrupt terminations could force layoffs, halt ongoing studies, and trigger costly study closeout requirements; unlike universities and academic medical centers, VA nonprofits lack endowments, tuition revenue, or clinical margins to absorb such disruptions. Veterans enrolled in or awaiting benefits from these studies could be stranded mid-study, and federal investments already made in research infrastructure could be wasted. We ask that multi-year research awards be excluded from discretionary “agency priority” terminations. [§§ 200.205–200.206] ICR is deeply concerned that the proposed pre-award review process (§§ 200.205–200.206) elevates discretionary review by political appointees while reducing independent peer review to an advisory role, departing from the VA’s longstanding commitment to rigorous, merit-based scientific review. Highly rated projects could be delayed or denied based on vague criteria such as perceived “questionable practices” or “affiliations,” without clear standards, transparency, or meaningful recourse. We are particularly concerned that the unique governance structure of VA-affiliated nonprofit corporations, established by Congress under 38 U.S.C. §§ 7361–7366 to advance veterans’ research, could be mischaracterized as a risk factor absent an explicit exemption. Such ambiguity threatens trusted public-private partnerships that have advanced veterans’ health care for decades and resulted in hundreds of millions of dollars of investments to advance veteran care. We ask that peer review be preserved as the primary basis for research funding decisions and that any risk factors be clearly defined. [§ 200.205] NPCs like ours partner closely with local VA medical centers and incur federally negotiated, independently audited indirect costs that reflect the infrastructure required to conduct compliant, mission-critical veterans research in integrated clinical environments. OMB’s Regulatory Impact Analysis does not evaluate how the proposed preference for applicants with lower indirect cost rates, “all else being equal,” would affect smaller or specialized research organizations, including VA-affiliated NPCs. Without that analysis, the consequences for research capacity and Veterans’ access to innovation remain unclear. Consistent with OMB’s guidance, this comment addresses only the proposed award-selection preference for lower indirect rates, not the negotiated indirect cost rate system itself. We ask OMB not to adopt this preference without fully evaluating its impact on organizations that sustain veterans’ research. For the reasons above, we respectfully urge OMB to reconsider these provisions and to fully assess their impact on VA-affiliated nonprofit research partners and the Veterans we serve before finalizing the rule. Thank you for the opportunity to comment. Respectfully submitted, Institute for Clinical Research, Inc.