Skip to Content


Cost Sharing in Department of Defense Research Programs Using Assistance Instruments

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble


Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics, DoD.


Notice of availability.


The Department of Defense (DoD) proposes to issue a DoD Instruction on the use of cost sharing in basic, applied, and advanced research projects carried out through grants and other assistance instruments. The purposes of the DoD Instruction are to ensure that cost sharing is used appropriately and to make awarding offices' cost sharing policies and practices clear to potential proposers. The DoD Instruction will provide consistent policies and procedures for assistance instruments awarded under the many research programs of the Army, Navy, Air Force, Defense Advanced Research Projects Agency and other Defense Agencies. The draft DoD Instruction is available on the Director of Defense Research and Engineering Web site located at​ddre/​research/​draftcostsharing.pdf.


Comments must be received by August 26, 2003.


Comments should be addressed to: Dr. Anne Matsuura, DoD Basic Research Office, 4015 Wilson Blvd., Suite 216, Arlington, VA 22203. Comments may be submitted via e-mail (

Start Further Info


Dr. Anne Matsuura, DoD Basic Research Office, at (703) 696-2530.

End Further Info End Preamble Start Supplemental Information


Over the past few years, research performers have expressed concern to Federal awarding agencies about their cost sharing policies and practices. In the late 1990s, for example, the Committee of Science of the National Science and Technology Council (NSTC) received commented on cost sharing when it conducted a review designed to find ways to relieve unnecessary sources of stress on the Government-university research partnership. Comments from universities suggested a need for clearer and more consistent agency policies on cost sharing practices and expectations. As a result of the NSTC review, the President issued Executive Order 13185 in December 2000 to establish guiding principles and operating principles for the research partnership between universities and Federal agencies. (The Executive order can be found at​html/​011001_​3.html. One operating principle is that Federal “agency cost sharing policies and practices must be transparent.” The Executive order refers to the full explanation of this operating principle in the April 1999 NSTC report entitled “Renewing the Government-University Partnership:”

“As in any investment partnership, each partner cointributes to the research endeavor. While the primary contribution of universities is the intellectual capital of the researchers' ideas, knowledge, and creativity, it is sometimes appropriate for universities to share in the costs of the research (and in some cases cost sharing is required by statute). Cost sharing can be appropriate when there are compelling policy reasons for it, such as in programs whose principal purpose is to build infrastructure and enhance an awardee's institution's ability to compete for future Federal awards. Cost sharing is rarely appropriate when an awardee is acting solely as a supplier of goods or services to the government since this would entail a university subsidy of goods purchased by the government. If agency funds are not sufficient to cover the costs of a research project, the agency and the university should re-examine the scope of the project, unless there are compelling policy reasons to require university cost sharing. Agencies should be clear about their cost sharing policies and announce when and how sharing will figure in selection processes, including explicit information regarding the amount of cost sharing expected.”

Start Printed Page 38315

The cost sharing issue arose again after the Congress enacted the Federal Financial Assistance Management Improvement Act of 1999 (Pub. L. 106-107). That law requires Federal agencies to streamline and simplify the award and administration of Federal grants. It also mandates that agencies obtain input from the affected public. Comments that Federal agencies received from grant applicants and recipients pointed out a need for agency action on cost sharing, reinforcing the earlier findings of the NSTC review.

The Department of Defense, which is active in the leadership of the interagency streamlining efforts under Public Law 106-107 and helped develop the guiding and operating principles set forth in Executive Order 13185, proposes to address cost sharing for assistance instruments through a DoD Instruction. This Instruction for assistance instruments will parallel and complement action the Department already has taken to address cost sharing issues for research and development contracts (a DoD policy memorandum of May 16, 2001, established a policy, since incorporated into paragraph E1.1.6 of DoD Directive 5000.1, that prohibits contractor cost sharing if there is no reasonable probability of commercial applications).

The proposed Instruction for assistance instruments would disseminate guidance for program managers and grants officers in research program offices in the DoD Components. The guidance is drafted in plain language, in a question-and-answer format. The intent is ot establish an easily understood DoD-wide policy framework to help ensure that proposers and research performers receive consistent, as well as fair and equitable, treatment on cost sharing matters. We invite input from potential proposers and performers of DoD basic, applied, and advanced research efforts to help us improve the proposed Instryctuib and better achieve this goal.

Start Signature

Dated: June 20, 2003.

Patricia L. Toppings,

Alternate OSD Federal Register Liaison Officer, Department of Defense.

End Signature End Supplemental Information

[FR Doc. 03-16251 Filed 6-26-03; 8:45 am]