Midterm aftermath: What Federal research funding deadline means for lab budgets
The votes are in. What comes next for business? This article is part of a four-part caa series exploring the post-election outlook for taxes, research funding, trade and growth across key regional markets.
Key points:
- • The current federal funding law runs through Dec. 11, before the new Congress takes office.
- • NIH institutes and centers may issue some non-competing continuation awards below previously indicated amounts.
- • Boston institutions received $2.46 billion in NIH funding in fiscal 2025, illustrating the local exposure to federal research decisions.
November 2026 — A research lab can receive another year of federal research funding and still face a difficult hiring decision. The National Institutes of Health (NIH) says its institutes and centers may issue some continuation awards below previously indicated amounts while the government operates under a stopgap that runs through Dec. 11.
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The current Congress faces that deadline before the Democrats who won both chambers in the November midterms take control in January. The election changes who will negotiate future appropriations, but it does not itself change the current NIH funding rules. For research institutions and their suppliers in Boston, Philadelphia and Pittsburgh, an individual award notice can shape hiring and purchasing decisions.
READ MORE: After the midterms, what’s next for taxes and trade?
The gap between an award and a purchase order
The stopgap keeps NIH operating at fiscal 2026 funding levels. The agency reported $47.5 billion in FY26 program funding, about 1% more than the year before. That funding level does not guarantee that every individual grant will receive its previously indicated amount.
NIH institutes and centers may issue non-competing continuation awards — funding for another budget period within an existing grant — at a lower level than indicated in the most recent award notice. These differ from competitive renewals, in which investigators apply for support beyond an existing grant’s project period. NIH describes the temporary reductions as consistent with its practices under previous continuing resolutions and says it will consider upward adjustments after FY27 appropriations are enacted.
That can leave research administrators with decisions that cannot always wait for Washington. A lab receiving a lower continuation award might preserve ongoing experiments while postponing a new instrument purchase or leaving a position unfilled. For a vendor, an anticipated sale could move into another quarter while the underlying research continues. These are potential responses to funding uncertainty, rather than documented outcomes at specific institutions.
There is also a distinction between paying for an experiment and supporting the facilities that make it possible. NIH awards can reimburse eligible indirect costs, subject to applicable rates and award terms. Those costs can include facilities operations and administrative support. NIH says FY26 policies remain in effect under the stopgap. A university maintaining specialized lab space must consider the overhead it can recover across its research portfolio.
Where federal research funding is concentrated
Across the country, universities reported $117.7 billion in research and development spending in FY24, according to the National Center for Science and Engineering Statistics. (The FY25 survey data is set to be released in late November.) Federal sources financed about $64.7 billion, or roughly 55% of the total.
That survey covers spending across research fields and federal agencies. It illustrates the importance of federal support without equating a grant award with money an institution spends in the same year.
The local exposure is critical. Boston institutions received $2.46 billion in NIH funding across 3,983 grants in FY25, according to the Boston Planning Department. Those figures cover the city of Boston, rather than the broader metropolitan area.
The University of Pittsburgh reported $669.7 million in NIH funding in FY25, citing the Blue Ridge Institute for Medical Research’s rankings. Pitt separately reported a total of $685.8 million when an additional $16.1 million in NIH-funded obstetrics and gynecology research was included.
These figures show the scale of research activity whose funding decisions can matter to campus suppliers, employees and service providers.
Vacancy tells a different story in each market
Greater Boston lab vacancy rose to 28.9% in 3Q26, according to CBRE. Large Cambridge subleases contributed to the market’s loss of occupied space.
In Philadelphia, CBRE attributed a decline in vacancy to a sale that removed 441,000 square feet of vacant lab space from inventory. Vacancy fell from 21.2% to 18.6%. Removing that space improved the vacancy figure without requiring new lab tenants to occupy it.
A research institution might delay fitting out space if an expected award is smaller. A startup’s lease decision may depend more heavily on a financing round or a development milestone. A landlord assessing demand needs to examine who is ready to occupy space, what will finance the fit-out and when the tenant expects to commit.
Suppliers face a similar distinction. A university department may defer an order until its continuation award is issued. A venture-backed company may need additional financing to sign the same contract, even if its university research partner keeps working. Serving several institutions can still leave a vendor exposed to a shared funding source.
What suppliers should watch next
Congress can extend temporary funding or enact full-year appropriations. An extension could carry the stopgap into the new Congress, while full-year funding would allow NIH to consider award adjustments. Those adjustments would not automatically restore every award to its previously indicated amount.
The congressional deadline also is not an expiration date for every existing grant. Institutions must assess the funding already obligated to their awards, the applicable budget periods and the terms governing its use. The Dec. 11 deadline will help determine the rules under which NIH continues operating. For a supplier, the practical question is when an institution can turn its funding into a purchase order or signed contract.
Read more in this series:
Texas exporters face USMCA comment deadline
North Carolina income tax cap puts growth costs in focus
Florida tax relief redraws the cost of development
Want more? Read the Invest: reports.
