Outgoing subawards may be issued with either a cost-reimbursable (most common) or a fixed-price payment mechanism.
Issuing fixed-price subawards from federal grants may require a sponsor’s prior approval. Obtaining prior approval can be avoided, however, if the subaward is listed as fixed-price within the proposal (see sample proposal language). If prior approval is needed, there is suggested language you can use with the sponsor that can be adapted to the specific circumstances.
It is important to note that budgets must match the payment mechanism within the subaward. For example, a cost reimbursable budget should not be based on deliverables, milestones, or patients recruited (for a clinical trial).
For more guidance on this topic, please see the Federal Demonstration Partnership (FDP) FAQs and the NIH Grants Policy Statement Section 8.1.2.11.