The Special Competitive Studies Project (SCSP), a nonprofit, nonpartisan initiative focused on strengthening America's long-term competitiveness in emerging technologies, has voiced strong concerns over proposed rule changes at the Office of Management and Budget (OMB) that could weaken the research enterprise underpinning U.S. technology leadership. The proposed revisions, described as the most sweeping in years, aim to overhaul regulations governing federal grants and research awards. SCSP has filed formal comments urging OMB to revise the rule before finalizing it.
While acknowledging the importance of accountability for taxpayer dollars, SCSP president Ylli Bajraktari emphasized that the proposed changes risk damaging the innovation engine that has driven American scientific success. "Political accountability and scientific expertise are not enemies," he said, "but applied without clear limits, the rule risks damaging the innovation engine that has been the backbone of America's scientific success." The new regulations contain several provisions of concern, including senior political appointees reviewing every discretionary award, reviewers being directed to weigh presidential policy priorities, peer review being downgraded to 'advisory,' and agencies having the ability to terminate active research awards simply because priorities changed after the work began.
The stakes are measurable, according to SCSP's 2026 Tech Competition Scorecard. The scorecard reveals that China holds a decisive overall lead in robotics for advanced manufacturing, and that the narrow U.S. lead in quantum is eroding under Beijing's coordinated, state-backed strategy. Meanwhile, the federally funded share of national research and development dropped by nearly one-third between 2010 and 2019, and federal AI research spending remains far below the $32 billion annual level recommended by 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 draw from a termination-for-convenience model used in government contracting, but research grants are fundamentally different. A research grant supports multiyear experiments, doctoral researchers, and laboratory partners using custom equipment and generating data over time. Stopping that work midstream destroys value that reimbursement cannot recover. The losses also extend to companies, investors, national labs, and startups that base their decisions on the stability and merit-driven nature of federally funded research. "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," Bajraktari noted.
SCSP's comments ask OMB to consider four key points before finalizing any changes. First, 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 in compliance, security, and program fit, but should not substitute their judgment for expert evaluation, and any override should be documented in writing against published criteria. Second, make awards durable: competitively awarded research grants should not be terminable simply because policy priorities changed after the fact. Termination should be reserved for legal violations, security concerns, or performance failures, with recipients given a chance to respond and wind down responsibly. Third, account for the private sector: agencies should assess whether changes will deter co-investment, interrupt commercialization pathways, or push globally mobile talent toward competitors. Fourth, assess the competitive impact: OMB's analysis only counts paperwork costs and calls them modest, but forgone discoveries and deterred capital are real national security costs, so major changes should come with a technology-competitiveness impact assessment.
SCSP also urged OMB to slow down, noting that an October 1 effective date would impose new selection and termination frameworks on fiscal year 2027 awards before agencies have built the procedures to implement them well. For more information, visit scsp.ai.
