The Special Competitive Studies Project (SCSP), a nonprofit focused on US competitiveness in emerging technologies, warns that proposed changes to federal research grant regulations could weaken the research enterprise underpinning American technology leadership. The Office of Management and Budget (OMB) has proposed sweeping revisions to rules governing federal grants, and SCSP has filed formal comments urging revisions before finalization.
Ylli Bajraktari, president of SCSP, acknowledges the need for accountability but cautions against overreach: “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 rules would allow senior political appointees to review every discretionary award, direct reviewers to weigh presidential policy priorities, downgrade peer review to “advisory,” and permit termination of active research awards if priorities shift.
The stakes are measurable. SCSP's 2026 Tech Competition Scorecard shows China leads decisively in robotics for advanced manufacturing, and the US lead in quantum is eroding. Additionally, the federal share of national R&D dropped by nearly one-third between 2010 and 2019, and federal AI research spending falls far short of the $32 billion annual recommendation from 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 borrow from government contracting's termination-for-convenience model, but research grants are different. Grants support multiyear experiments, doctoral researchers, and lab partnerships. Stopping work midstream destroys value that reimbursement cannot recover. The uncertainty also deters private investment and talent, weakening the innovation ecosystem.
SCSP's comments outline four key recommendations: keep merit at the center of award decisions, make awards durable by limiting termination to legal violations or performance failures, account for private-sector co-investment and commercialization, and assess the technology-competitiveness impact of any changes. Bajraktari emphasized that “forgone discoveries and deterred capital are real national security costs even when they never appear as a line item.”
SCSP also urges OMB to delay the October 1 effective date, arguing that agencies need time to build proper implementation procedures. For more details, visit SCSP's website.
