On July 7, 2025, the National Institutes of Health (NIH) Office of Policy for Extramural Research issued NOT-OD-25-128, titled “Guidance on Enforcement of Closeout Requirements During the Appeals Process” (the Notice). The Notice indicates that if an award recipient has submitted timely an appeal to NIH in response to an award termination notice, NIH will not, during the pendency of such appeal, act unilaterally to closeout the award based on technical non-compliance with closeout requirements.
In the Notice, NIH acknowledges that “[s]ome [awardees] have received responses [to their appeal submissions to NIH] and others have not, which has placed the recipient at risk for noncompliance with closeout requirements to no fault of the recipient” (emphasis added). And because of this, “NIH is alerting the extramural community that, in cases where a recipient has submitted an appeal, but has not yet received a response, NIH will not take action to initiate unilateral closeout while the appeal is under review” and “will document our compliance records and ask that the community use this notice as supporting documentation to prevent an audit finding related to closeout” (emphasis added).
This Notice addresses a concern expressed by many award recipients about their risk of noncompliance with closeout requirements while their appeal submissions have been pending. In fact, many recipients have submitted closeout documentation during a pending appeal to avoid a technical violation of award terms—with standard closeout requirements often appearing in termination notices and subsequently revised notices of award.
Although the Notice appears to alleviate the risk of a finding of non-compliance, the Notice does not expressly state that recipients should or may hold off on submission of closeout documentation during a pending appeal, but rather implies that if a recipient fails to submit closeout documentation within standard timeframes after receiving a termination notice, such failure will not result in a technical violation of award terms that would allow NIH to take an enforcement action for non-compliance (i.e., unilateral award termination).
Also, while not cited in this Notice, existing federal regulations governing administrative appeals already restrict an agency’s ability to take final action on a given award when an agency determination relative to such award is being appealed by the recipient. Under the Public Health Service (PHS) grant appeals procedure, “[w]hen a request for review has been filed . . . with respect to an adverse determination [such as a termination notice], no action may be taken by the awarding agency pursuant to such determination until the request has been disposed of.” 42 CFR § 50.406(c); see also 45 CFR § 16.22 (governing second-level appeals to the HHS Departmental Appeals Board (DAB)). Nonetheless, it is arguable that before issuance of this Notice, a recipient’s failure to submit closeout documentation could have been considered its own non-compliance event that could trigger termination, independent from the reasons for termination provided by the agency in its termination notice (e.g., change in agency priorities). As such, this Notice appears to shield recipients from such technical non-compliance.
This Notice begs certain additional questions. For example, if an appeal to NIH is unsuccessful, at what point does the closeout “clock” start and what will be the duration of that clock—120 days after the appeal decision or something else? And if a recipient decides to appeal the adverse decision to the DAB, would closeout requirements continue to be paused, even though NIH would not be the reviewing body? Given these and other uncertainties observed in agency guidance and operations of late, recipients might still choose to submit closeout documentation, with language acknowledging any active appeal and reserving rights should the award be reinstated, either due to a successful appeal or otherwise. However, such decision should be made by the recipient with consideration of the particular circumstances of the terminated award, including the effort and resources required to submit an appeal and, in tandem, to prepare closeout documentation.
