Question

What are the effects of the fixed amount grant?

Answer 1

Under fixed-amount grants, grantees do not have an approved budget in their grant award and do not have specific restrictions on the use of the grant funds because the amount of the grants will be significantly less than the cost of conducting the program.Fixed amount awards means a type of grant agreement under which the Federal awarding agency or pass-through entity provides a specific level of support without regard to actual costs incurred under the Federal award.Fixed amount awards and institutional capacity building. A fixed amount award can be used for many activities and can be awarded to grantees with any level of experience. However, when awarding to a non-U.S. NGO with little or no experience in receiving and implementing USG grants, a fixed amount award can provide a manageable vehicle for both USAID and the recipient and assist in building institutional capacity as the recipient completes the grant activities. While fixed amount awards have been recognized in the federal grant regulations for almost six years, they are not likely being utilized to their full potential.The Federal award amount is negotiated using the cost principles (or other pricing information) as a guide. The HHS awarding agency or pass-through entity may use fixed amount awards if the project scope is specific and if adequate cost, historical, or unit pricing data is available to establish a fixed amount award based on a reasonable estimate of actual cost. Payments are based on meeting specific requirements of the Federal award. Accountability is based on performance and results. Except in the case of termination before completion of the Federal award, there is no governmental review of the actual costs incurred by the non-Federal entity in performance of the award. Some of the ways in which the Federal award may be paid include, but are not limited to short.Milestones should strike a balance between being ambitious and realistic. They can be drafted as outputs, outcomes, or a mix of both. Instead of one all-or-nothing payment at the end, there can be a series of milestones within a single fixed amount award to provide some working capital for the grantee. To help cover initial operating costs, the first milestone could be a larger payment based on a simple deliverable. In this way, fixed amount awards do not have to be binary and can be designed on a continuum.