The Special Competitive Studies Project (SCSP), a nonprofit, nonpartisan initiative focused on strengthening America's long-term competitiveness in emerging technologies, has issued a stark warning: proposed rule changes at the Office of Management and Budget (OMB) could weaken the research enterprise that underpins American technology leadership. The organization has filed formal comments urging OMB to revise the rule before it is finalized.
While SCSP supports OMB's stated goals of transparency, research integrity, and stewardship, it argues that the proposed changes contain several concerning provisions. According to Ylli Bajraktari, president of SCSP, 'Senior political appointees would review every discretionary award, reviewers would be directed to weigh presidential policy priorities, peer review would be explicitly downgraded to 'advisory,' and agencies could terminate active research awards simply because priorities changed after the work began.' He emphasizes that 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 stakes are measurable. SCSP's 2026 Tech Competition Scorecard reveals that China holds a decisive overall lead in robotics for advanced manufacturing, and 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. As Bajraktari notes, 'America already faces a funding gap, and should not compound it with a confidence gap.'
The proposed changes take cues from a termination-for-convenience model of 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 reach companies, investors, national labs, and startups that make decisions based on whether federally funded research is stable and merit-driven. '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,' said Bajraktari.
In its comments, SCSP asks 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 of scientific quality, 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: before changing how research awards work, agencies should assess whether the change will deter co-investment, interrupt commercialization pathways, or push globally mobile talent toward competitors. Fourth, assess the competitive impact: OMB's own analysis counts only paperwork costs and calls them modest, but forgone discoveries and deterred capital are real national security costs. Major changes to federal research policy 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.
