States Challenge Energy Department’s Limits on Indirect Costs

More than a dozen states and the District of Columbia are suing the Department of Energy over its decision to limit financial assistance to states and local governments, calling the move unlawful and arbitrary.

The new policy “unlawfully contravenes the regulatory scheme provided by DOE and the Office of Management and Budget that allocates indirect costs based on a single rate that a state agency negotiates,” New York, California, and others said in their complaint filed in the US District Court for the District of Oregon on Aug. 15.

The state agencies that receive the funding are responsible for promoting ...