There are several funding mechanisms available to use when issuing subawards. The appropriate mechanism may be dependent upon the scope of work. The scope of work needs to provide sufficient detail to understand when payments shall be made.
Cost Reimbursable
Example: when the collaborator is performing experiments, and the costs are for salary and materials, a Cost Reimbursable mechanism is the appropriate funding type. This means the subrecipient would invoice monthly for the actual costs of the work performed in the previous month.
Fixed Fee
For work involving enrollment of patients, or per event type actions required for payment, a Fixed Fee mechanism is used. A fixed amount is established to be paid for each event. Invoices may be submitted on a predetermined schedule, or at a milestone. The scope of work description would include the required deliverables for payment and a payment schedule.
Fixed Price
A Fixed Price mechanism is used when the subrecipient will be paid a predetermined amount, based on costs during a project period, for a specific deliverable.
Funding for subrecipients is not typically provided in advance of the work performed.