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Plain-English guide · for small nonprofits
2 CFR 200.333, explained in plain English
Updated September 2026
The subaward that pays for a result instead of a reimbursed cost, and the two conditions on using one.
A fixed amount subaward pays an agreed sum for agreed work, with no cost reporting and no reconciliation of actuals. §200.333 permits it, but only with prior written approval from the federal agency and only up to $500,000.
What it is, and why a pass-through entity wants one
Ordinary subawards are cost-reimbursement: the subrecipient spends, documents, invoices, and you verify. A fixed amount subaward instead sets a price for defined deliverables or milestones. The subrecipient is paid on completion, not on receipts.
For a small subrecipient that is a large relief. They are not required to run a compliant cost-accounting system for your $15,000 subaward. For the pass-through entity, monitoring shifts from checking invoices to verifying that the work happened.
The two conditions
Prior written approval from the federal awarding agency
Not from you. Not implied by the budget. You ask the agency and you get it in writing before the subaward is issued. This is the condition most often skipped.
The amount is $500,000 or less
The section sets a flat ceiling of $500,000. It is worth knowing that this used to be tied to the simplified acquisition threshold; the 2024 revision cut that link and wrote a fixed number instead, so guidance published before October 2024 has the wrong test. Above $500,000, a fixed amount subaward is not available.
What does not change
A fixed amount subaward is still a subaward. The subrecipient is still a subrecipient under §200.331, you still owe the monitoring at §200.332, and the amount still counts toward your federal awards expended. What changes is what you monitor: performance and completion rather than allowability of individual costs.
Accountability is based on results. That makes the deliverables the whole agreement, so they have to be written well enough that both sides know what "done" means.
When to reach for one
- The subrecipient is small and has no grant-compliant accounting system.
- The work has a clear, verifiable output rather than an open-ended effort.
- The amount is modest and the administrative cost of cost-reimbursement would be a real share of it.
And when not to: if you cannot define completion precisely, a fixed amount subaward converts a cost dispute into a performance dispute, which is harder.
This is general information, not legal or accounting advice. Federal grant rules change and are applied differently by different agencies and auditors. Check with your auditor, your grant officer, or an attorney before relying on any of it.
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Sources: 2 CFR Part 200 (eCFR), read 1 September 2026. Federal grant rules change; check the current text before relying on this.