In my mind how your outsource a project depends highly on what the project is about, and about one's organization way of doing things. How much does the project depend on communication, versus how much is my organization outsourcing ready.
Scott here suggests to rotate people back and forth to minimize communication problems to de-risk and fix communciation gaps. Yes I agree to a certain extent, it will make the project that much more expensive.
Still I don't believe this works all the time, communication gaps aren't only a time zone thing. Face to face communication are not an immediate fix for product environment understanding, there is still a ramp up there to consider. If you ask me this is one factor people tend to forget too often about projects, the need for the product environment understanding. Jumping right into a project means, no ramp up, and this means the people, crew, team, you outsource too - understands your realities. Typically when a project falls into the category where product environment is necessary, innovation is high. When innovation is high, communication is high, but still a lot goes unsaid, because it's a lot of discovery, and to know where to look, you're back to - you guessed right - understanding the product environment.
He also says that fix bid should be thrown out the window, I think they are a necessary evil in the establishement of a relationship. It's much easier to do Time and material, or a variation of as suggested "Gated project financing", but trust must be established first. Trust that the vendor is not only credible, but reliable, say what you do, do what you say!