The NSF released its Minerva-related solicitation on Wednesday, and there is no provision for researchers to decline DoD money. This particular project will be financed entirely by the DoD, full stop.

But the NSF confirmed yesterday that the procedures I describe above will apply in cases where the DoD offers supplemental funding to research projects in “regular” NSF social-science programs.

More here, with apologies for the paywall:
http://chronicle.com/daily/2008/08/4079n.htm

This not only clarifies a great deal, but it also lends some weight to what Hugh Gusterson has been saying about the role of the NSF and how this might offer an alternative route. Had I been more imaginative, and clever, I could/should have guessed that there was another option, such as the one you describe.

Again, thanks very much.

To (hopefully) clarify the point about funding:

Part of what the memorandum of understanding contemplates is that the DoD might offer supplemental funding for pre-existing, non-Minerva-related NSF social-science programs.

For example, the DoD is reportedly interested in the NSF’s program in Human and Social Dynamics [http://www.nsf.gov/funding/pgm_summ.jsp?pims_id=11678].

In such cases, here is how the supplemental funding would work:

Imagine that the NSF receives 50 Human + Social Dynamics proposals and rank-orders them. On its own, the NSF can afford to finance the top 10 proposals. At this point, the DoD might peer over the NSF’s shoulder and say, “We’ll offer supplemental funding for the proposals you ranked as 3, 4, and 7, because those are on topics of interest to us.”

The NSF will then approach the principal investigators of proposals 3, 4, and 7, and say: “The DoD is offering supplemental funding to support your project. If you turn down the DoD money, there’s no penalty to you. We’ll still finance your project, and you’ll get no less money than you would have otherwise. However, if you accept the DoD money, that will free up NSF resources and allow us to support the proposals we rank-ordered as 11, 12, 13. So you’ll be doing a good deed for your peers if you take the DoD money.”

If and when the NSF releases a solicitation that is explicitly geared toward Minerva-related research projects, there will be some similar provision allowing people to decline DoD money.

Some scholars have expressed concern about the DoD’s scrutiny of these NSF proposals. But I’m not sure that this new DoD/NSF proposal actually changes much, in that regard. The NSF’s processes are generally transparent, so if the DoD wants to know, for example, who’s getting NSF support to do field work in Uzbekistan, they’ve always had that ability.