Overview
The NIH has issued a significant policy update governing foreign subawards. The revised guidance prohibits the traditional nesting of foreign subawards under a parent NIH grant to ensure enhanced tracking and oversight of federal research funds.
This article breaks down the key highlights of this new policy and what it means for institutions engaged in federally funded research with international collaborators.
Why the Change?
The NIH has identified widespread inconsistencies in how subawards, particularly foreign ones, are reported under the Federal Funding Accountability and Transparency Act (FFATA). The policy revision is a response to these issues, with the goal of:
- Improving transparency in the use of federal funds abroad
- Enhancing NIH’s ability to monitor spending down to the subaward level
- Supporting national security by reducing data opacity in foreign collaborations
Key Policy Highlights
Prohibition of Foreign Subawards in Parent Grants
NIH will no longer allow parent award structures to include foreign subawards. Instead, foreign subrecipients will receive independent but linked awards. This change allows the NIH to track each award’s expenditures separately while maintaining collective scientific reporting through the Research Performance Progress Report (RPPR) submitted by the prime institution.
Implementation Timeline
- NIH will begin implementing the new structure no later than September 30, 2025, before the start of Fiscal Year 2026.
- Until then, NIH will not approve any new, renewal, or non-competing continuation awards that include foreign subawards.
- NIH will also not accept prior approval requests to add foreign subawards to ongoing projects.
Prospective Application
This policy applies to all new NIH grants and cooperative agreements to domestic and foreign entities. It does not apply retroactively—existing awards are unaffected unless they are being renewed or continued.
What’s Still Allowed?
This update does not impact all foreign collaborations. The following remain permissible under the updated policy:
- Direct foreign awards made by the NIH
- Payments to foreign consultants
- Purchases of unique equipment or supplies from foreign vendors
These distinctions allow continued scientific collaboration with foreign entities, provided the mechanisms fall outside subaward structures.
What If My Project Needs a Foreign Subaward?
If the foreign subaward is essential and cannot be replaced or revised:
- NIH may assist in renegotiating the award to shift the scope of work domestically.
- If not feasible, NIH may engage in a bilateral termination of the project, with appropriate considerations for patient safety and animal welfare.
What’s Next?
The NIH plans to expand this new award structure to domestic subawards, creating a consistent framework across all funding relationships.
In the meantime, institutions should:
- Review the new rules to understand compliance stipulations
- Review current and planned collaborations involving foreign subrecipients
- Engage early with NIH program officers to navigate potential issues in funding applications or renewals
Final Thoughts
Institutions should act now to prepare for the upcoming changes and ensure compliance by the September 30, 2025 deadline. If you collaborate internationally or manage NIH-funded projects, now is the time to assess your subaward strategies and stay ahead of policy transitions.
