Practical Aspects of Negotiations - Clean Sky€¦ · 1.5 Practical hints for project implementation (3/4) Conclusions p.1 ¾TM is focused on „technical part DoW” … do not forget:

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Practical Aspects of NegotiationsNegotiation Kick-off meeting / 9th Call CSJU

Brussels, 27-11-2011Andrzej Podsadowski GRA-ITD PO

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Introduction

Negotiations ≠ Negotiations in business meaning

Negotiations = Preparation of Data and Annexes for Grant Agreement

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Introduction

Negotiations step by step:1.1 Technical Negotiations

1.2 Financial/Legal Negotiations

1.3 Big Picture

How it Works:1.4 Opening Negotiations

1.5 Hints from Project Implementation

1.6 Special case – not validated PIC

1.7 Examples of payments

Q&A / Discussion

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1.1 Technical Negotiations (1/4)

• The proposal may need to be adapted to meet the recommendations of the evaluation, as described in the Negotiation Mandate.• The CSJU/TM verifies whether the project objectives are 'SMART'

(S-Specific, M-Measurable, A-Attainable, R-Realistic, T-Timely).

The purpose: 1. DoW (Annex I to GA) => upload NEF!

2. Negotiations ReportReporting Periods

a) for TM supervisionb) for GA (indicated in NEF)

Starting Date

Legal obligations against ITD (Implementation A. or Accession)

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• The full work plan of the project has to be defined in sufficient detail.

• The work to be carried out by each of the beneficiaries and any potential future expansion of the consortium has to be defined in sufficient detail.

• The list of deliverables and their content, timing and dissemination level are agreed. “An extra deliverable(s) can be defined in NEF latter on (dissemination for example)

• The project milestones and their assessment criteria are agreed.

• An indicative time schedule for the project reviews, synchronized with thereporting periods, could be established (if not pre-defined in the special conditions of the Grant Agreement).

1. All (above mentioned) data to be introduced in NEF2. Data from NEF would be transferred to SESAME (reporting)3. (Periodic/Final) reporting with help of SESAME/FORCE

via Participant Portal

1. All (above mentioned) data to be introduced in NEF2. Data from NEF would be transferred to SESAME (reporting)3. (Periodic/Final) reporting with help of SESAME/FORCE

via Participant Portal

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Part“B”

ESR

Part“A”

DoW

A2.6

Part“A”

(Annex I)

Negotiations

Project / GA preparation file

Proposal

Data in NEF

Negot.Report

Fin.Identification

A2.5

Printed out and signed

Who: The coordinator + Beneficiaries +

Project Officer (Legal Officer)

Who: The Coordinator

Who: All beneficiaries

Who: The coordinator + Topic Manager

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1.1 Technical Negotiations (4/4) - NEF !!!

Part APart B

Here:A 2.5A 2.6

A4 (Financial Identification)

Please upload NEF with DoW (version nr and the date of issue)

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1.2 Financial/Legal Negotiations

• The total costs, total eligible costs and the maximum CSJU financial contribution. Special attention should be given to the methodology to calculate the personnel costs and the indirect costs.

• A table of the estimated breakdown of the budget and the Community financial contribution per activity to be carried out by each of the beneficiaries is established.

• The amount of the pre-financing is established.• The start date and the duration of the project are agreed upon (2 options: Fixed Starting Date OR Standard Starting Date)• The operational capacity of the proposed coordinator to be verified, i.e. whether that organisation has the required management skills, capabilities and experience to carry out the coordinator’s role.• The need for the inclusion in the Grant Agreement of any special clauses is established.• Where applicable, a 'road map' is established for any planned competitive calls relating to the later addition of new project partners and the budget available for the Consortium's expansion agreed upon.

• The timing of the reporting periods is established.

• Any subcontracting or third-party issues must be clarified. (2 options for subcontracting)• The financial capacity of the coordinator and any other applicant with an EC contribution exceeding EUR 500,000, except for public bodies, higher and secondary education establishments and entities whose participation is guaranteed by a Member State or an Associated Country, is assessed

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Validation of Beneficiaries

Financial Viability Check(Excel)

GPF/

NEF

Project Implementation

Validation of beneficiaries: The Grant Agreements can only be offer to (FP7) validated legal entities. Each legal entity is validated only once for all participations in FP7.

1.3 Big Picture (1/3)Negotiations = GA Preparations !!!

PinkFile

Neg.Rep.

Part A

Part B

ESR

DoW

Opening of Negotia-tions

DraftGrant

AgreementSelection & approval of winner

GrantAgreement

(CSJU ED signature)

(Coordinator’s signature first)

Date of CSJU ED signature =

GA coming into force

(Internal CSJU)

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1.3 Big Picture (2/3)Project’s Starting date (the Coordinator + TM)

Fixed Starting Date

GrantAgreement

Start DateKoM


Pre-financing – 45 days

Standard procedure

GrantAgreement

Start DateKoM



Time gain

Negotia-tions

Negotia-tions


1st day of the month following the month when GA is signed

A way to manage

“eligible cost” &

Time schedule of ITD

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Coordi-nator

TMMember of ITD

Implementation Agreement

orAccession toITD’s Cons A.

Internal ConsortiumAgreement(DESCA or

IMG4)

GrantAgreement

1.3 Big Picture (3/3)Legal dependencies

CSJU

! Start work on legal relationships between ITD and the consortium a.s.a.p.

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GrantAgreement



Excerpts from “Core GA”Art.6 p.1 ….A pre-financing shall be paid to the coordinator within 45 days following the date of entry into force of this grant agreement. The coordinator shall distribute the pre-financing only to the beneficiaries who have acceded to the grant agreement

!

Delivery of Form A to CSJU(within 45 days)

Notification whether Implementation A.or Accession is in place

Notification whether the (internal)Consortium agreement is in place

Excerpts from Art.1 of “core Grant Agreement”.2. The coordinator shall send to the JU one duly completed and signed Form A per beneficiary at the latest 45 calendar days after the entry into force of the grant agreement…3. Should any legal entity identified above, fail or refuse to accede to the grant agreement within the deadline … the JU is no longer bound by its offer to the said legal entity(ies). The consortium may propose to the JU … appropriate solutions to ensure the implementation of the project.

CSJU will wait untilAll notifications are delivered

CSJU will wait untilAll notifications are delivered

Reasons for postponing of the pre-financing

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How it works?

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1.4 Opening Negotiations (1/2)

1st e-mail: Letter Opening Negotiations addressee: the coordinator and TM in cc:Confirmation of commencing negotiations (already the Coordinator has

been informed regarding „above threshold” status(Tentative) deadlinesESR

2nd e-mail: Link to NEF (1st Negotiation Session)addressee: the coordinator all data for preparation of GA (please upload DoW!)(Tentative) deadlinesin case more than 1 beneficiary – the coordinator could/should assign

rights for filling in NEF

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1.4 Opening Negotiations (2/2)

Practical hints:Status of PIC (ask PO !!!) – critical …. Potential slow downA2.5 ; A2.6 ; A4, Financial Viability Check tool – important, please send

it a.s.a.p.Access to NEF by coordinator … check whether it works…

Ask PO for any clarification and help …Do not hesitate to close negotiation session when you feel all relevant

information is correct and in the system … There is no limit for number of Negotiation Sessions

In case you spot a „mistake” in submitted session … contact PO – next negotiation session would be open

Practical hints:Status of PIC (ask PO !!!) – critical …. Potential slow downA2.5 ; A2.6 ; A4, Financial Viability Check tool – important, please send

it a.s.a.p.Access to NEF by coordinator … check whether it works…

Ask PO for any clarification and help …Do not hesitate to close negotiation session when you feel all relevant

information is correct and in the system … There is no limit for number of Negotiation Sessions

In case you spot a „mistake” in submitted session … contact PO – next negotiation session would be open

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1.5 Practical hints for project implementation (1/4)The structure of Grant Agreement

Annex VII – Form E

Grant AgreementCore text

Annex I - DoWAnnex II – Gen Cond

Annex III – Form AAnnex IV – Form B

Annex V – Form CAnnex VI – Form D

Annex II – General Conditions (!!! Important to know)

Annex III – Form A – Accession of beneficiaries to the Grant Agreement

Annex IV – Form B – Request for accession of a new beneficiary

Annex V – Form C – Financial Statement

Annex VI – Form D – Terms of reference for the certificate on the financial ststements

Annex VII – Form E – Terms of reference for the certificate on the methodology

Major Changes to

“core text” or

DoW

via Amendments

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1.5 Practical hints for project implementation (2/4)Project Implementation

Final CSJU contribut.

Periods 2 - 4Period 1

60 d 60 d

Final Report

Periodic ReportPeriodic

Report

Societal implication

Plan for Using &

Dissemin.

30 d

105 d FINAL Payment

Interim Payment

105 d

To be agreed:

How TM is to be notified regarding accomplished deliverables ?

Pre-financing ≤ 80% of CSJU contribution to first 18 monthΣ(Pre-financing + Interim

payments) ≤ 80% CSJU contribution

Pre-financing ≤ 80% of CSJU contribution to first 18 monthΣ(Pre-financing + Interim

payments) ≤ 80% CSJU contribution

Examples of

Payments at

The end of this ppt

Special Templates, Accessible via Participant Portal

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Participant Portal (FP7 Projects ONLY !!)http://ec.europa.eu/research/participants/portal

RD : Reporting and Deliverables (SESAM) FR : Financial

Reporting(FORCE)

Reporting via SESAM and FORCEC(Participant Portal)

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1.5 Practical hints for project implementation (3/4)Conclusions p.1

TM is focused on „technical part DoW” … do not forget:Dissemination and ExploitationGender issue

Flexibility (tailoring to the case) is more than important:

Starting date (eligibility of cost) is a challenge … (for coordinator:) in case of Fixed Starting date before GA is signed do „cash flow” in order to be sure the project is affordable

Check „cash flow” against expected payments … to minimize riskof project failure; Reporting periods could be of different duration

In case of „no financial records” or weak Financial Viability either amount of pre-financing or a collateral would be agreed/negotiated

Ideally if Reporting periods corresponds to important milestones

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Subcontracting (also described in DoW) … do not forget:Only minor topicsNo IPR (Intellectual Property Rights)Impossible between members of the consortium (Wind Tunnel Test is

the exception)Misunderstandings and challenging items:

Reporting periods in Negotiations Report … it is intended as an input to Grant Agreement (independently from reporting to TM)

Legal relationships between the project consortium and ITD …quite often TM doesn’t knows who within ITD deals with that issue (Legal Department of TM’s employer)

Documents/Guidelines (and templates) are available in published CSJU Calls or CORDIS … in case of difficulties please contact PO

for more than 1 beneficiary the project consortium agreement is to be concluded

1.5 Practical hints for project implementation (4/4)Conclusions p.2

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1.6 Special case – not validated PIC (1/3)

General purpose:

the existence;

the legal status;

the operational capacity; and

the financial capacity

Categories of legal entities

PIC status:ValidatedTemporaryNo PIC

Opening Letter(requested documents)

Should depend on PIC statusNOT the case

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Verification of existence and legal status (affects CSJU contribution rate !)

For natural persons:i) A legible photocopy of the valid identity card or passport;ii) If applicable, an official VAT document.

For public bodies:iii) A copy of the resolution, law, decree or decision establishing the entity

in question; or, failing that, any other official document attesting to the establishment of the entity as a public body;iv) If applicable, an official VAT document.

For other legal entities:v) A copy of any official document (e.g. official gazette, register of companies, etc) showing the participant's legal name and address and the registration number given to it by the national authorities;vi) A copy of the VAT registration document, if any, and only if the VAT number does not appear on the official document referred to above.

The request for validation and supporting documents must be provided to Central Validation Team via Participants

Portal (task for LEAR).


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Financial viability check (affects garantee/collateral to GA)

PurposeIn order to be financially viable, a legal entity must be:

• liquid: capable of covering its short-term commitments;

• solvent: capable of covering its medium and long-term commitments;

• profitable: generating profits, or at least with self-financing capacity.


all coordinators, exception - „public body”, and other beneficiaries requesting more than EUR 500.000,all coordinators, exception - „public body”, and other beneficiaries requesting more than EUR 500.000,

In case of „Not validated beneficiary” CSJU assistsfast validation by CVT

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Period 3 (12m)Period 1 (18m)

Pre-financing ≤ 80% of CSJU contribution to first 18 monthΣ(Pre-financing + Interim payments) ≤ 80% CSJU contributionPre-financing ≤ 80% of CSJU contribution to first 18 monthΣ(Pre-financing + Interim payments) ≤ 80% CSJU contribution

Period 2 (12m)

Max CSJU contribution:

200 k€


100 k€

Actual/eligible cost:

190 k€


100 k€

Money owned by the consortium

Money owned by CSJU

Interim payment after P1:140 k€

Final payment:80 k€

Pre-financing:80 k€

A project:

Max. CSJU contribution

400 k€

80% - 320 k€

20% - 80 k€


110 k€


140 k€

Interim payment after P2:100 k€Although ∑ of cost = 330k€But ∑ of payments = 320 k€

Transfer of ownership of 80 k€ (pre-financing)

1.7 Examples of payments (1/4)A general case

No Gua

rante

e Fun

d

(no d

educ

tion f

rom pr

e-fin

ancin

g)

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1.7 Examples of payments (2/4)Single Reporting Period

A certificate on the financial statements shall be submitted for claims of interim payments and final payments when the amount of the JU financial contribution claimed by a beneficiary under the form of reimbursement of costs is equal to or superior to EUR 200 000, when cumulated with all previous payments for which a certificate on the financial statements has not been submitted. A certificate on the financial statements will be submitted in all cases at the end of the project for all costs for which a certificate on the financial statements has not been submitted previously. (Form D – Annex VI).

Max. CSJU contribution: 100 k€

Pre-financing: ≤ 80 k€

Actual/eligible cost: 98.5 k€

Final payment: 18.5 k€

Should be FormC certified/audited?

No Guarantee Fund

(no deduction from pre-fin

ancing)

Periodic and Final Reports to be deliveredPeriodic and Final Reports to be delivered

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1.7 Examples of payments (3/4)Periodic report

The consortium shall submit a periodic report to the JU for each reporting period and a copy of it (excluding the financial statements) to theresponsible ITD member as defined in Annex I, within 60 days after the end of each respective period.

The reporting shall comprise:a) an overview, including a publishable summary, of the progress of work towards the objectives of the project, including achievements and attainment of any milestones and deliverables identified in Annex I. This report should include the differences between work expected to be carried out in accordance with Annex I and that actually carried out,

b) an explanation of the use of the resources, and

c) a financial statement, from each beneficiary together with a summary financial report consolidating the claimed JU contribution of all the beneficiaries in an aggregate form, based on the information provided in Form C (Annex V) by each beneficiary

Reporting ToolsSESAM & FORCE

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1.7 Examples of payments (4/4)Final report

The consortium shall submit a final report to the JU and a copy of it to the responsible ITD member as defined in Annex I, within 60 days after the end of the project.

The report shall comprise:a) a final publishable summary report covering results, conclusions and socioeconomic impact of the

project.b) a report covering the wider societal implications of the project, including gender equality actions,

ethical issues, efforts to involve other actors and spread awareness c) the plan for the use and dissemination of foreground.

When providing a copy of their periodic and final reports to the responsible ITD member, the beneficiary(ies) may make the content of such reports subject to confidentiality provisions !!!.

The coordinator shall submit a report on the distribution of the JU financial contribution betweenbeneficiaries. This report must be submitted within 30 days after receipt of the final payment

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Q&A / Discussion

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Thank You all