Research Executive Agency

Alessandra Forzano

Anna De Rycker-Stefanczyk

REA S3 - Security Research

Seventh Framework Programme 2007-2013

Security Research

FP7 rules for participation and legal issues

Info Day16th September 2009

Who can participate?Who can participate?

• Any undertaking, university, research centre or other legal entity established in a – Member State (MS) – Associated Country (AC = Iceland, Liechtenstein, Norway, Croatia,

Serbia, Turkey, FYROM, Switzerland, Israel, Albania)

• If the conditions for participation are met:– Minimum number: at least 3 independent participants from 3 MS/AC

(Joint Research Centre (JRC) as if established in another MS/AC)– Additional conditions of Work Programme (WP) or Specific Programme

(SP) (i.e. number/type of participants, place of establishment)

• International organisations and participants from third countries only in addition to the minima

• General principles: co-financing and no profit

Eligibility for fundingEligibility for funding

• Legal entities from MS and AC or created under Community law (and JRC)

• International European interest organisations

• Legal entities established in International Cooperation Partner Countries (ICPC), and

• International organisations and legal entities from third countries other than AC or ICPC only if:

– provided for in WP or SP; or – the EC financial contribution is essential for carrying out the action; or– bilateral agreement between Community and the third country

Similarities with FP6 contractSimilarities with FP6 contract

• Structure: – Core part: GA parameters – Annex I: DoW – Annex II: General Conditions– Annex III: Specific provisions for funding schemes– Annex IV, V & VI: Forms A,B & C– Annex VII: Form D terms of reference for the

certificate of costs and Form E certificate on the methodology (NEW)

• Consortium Agreement mandatory

New in FP7New in FP7

→ Certificates→ 75% financing for some entities→ No cost models→ Guarantee Fund→ Less checks – more audit→ Liquidated damages applied

Forms AForms A

• The coordinator shall endeavour to ensure that each beneficiary accedes to the grant agreement by signing Forms A in 3 originals, countersigned by the coordinator

• All Forms A are sent by coordinator within 45 days after the entry into force of the grant agreement

• After 45 days REA is no longer bound by its offer to the beneficiary who did not sign Form A. The consortium may propose to REA appropriate solutions to ensure the implementation of the project.

• Pre-financing is paid to the coordinator for distribution to partners which signed Form A after the minimum number of beneficiaries is reached (Article 6 GA).

The General ConditionsThe General Conditions

Annex II of the GA

II.2. Consortium organisationII.2. Consortium organisation

The coordinator shall:

• Administer the Community financial contribution (allocation per beneficiary and activity)

• Keep the records (always knows what portion of Community funding has been paid to whom)

• Inform the REA of the distribution of the Community financial contribution (when, how much)

• Review the reports before transmitting them to REA

• Monitor the compliance with obligations under GA

II.2. Consortium organisation II.2. Consortium organisation

The beneficiaries shall :

• Provide all detailed data requested by REA or Commission

• Carry out the project jointly and severally vis-à-vis the Community

• Engage to foster dialogue and debate on the research agenda

• Allow the REA to take part in meetings concerning the project

• Regulate by a written consortium agreement :– i. the internal organisation of the consortium (also decision making procedures)– ii. dissemination and use, and access rights– iii. the distribution of the Community financial contribution– iv. the settlement of internal disputes (including cases of abuse of power)– v. liability, indemnification and confidentiality arrangements between the

beneficiaries

II.4-5 Reports and deliverablesII.4-5 Reports and deliverables

• The Consortium submits to REA:

• A periodic report within 60 days after the end of each reporting period

• A final report within 60 days after the end of the project

• REA evaluates project reports and deliverables required by Annex I and pays within 105 days of their receipt (unless suspension of time-limits, payments or the project itself)

• If REA is unjustifiably late, it pays interests according to the applicable Rules, at the rate applied by the European Central Bank for its main re-financing operations in Euros, plus 3.5 points (exception: not applicable to public bodies of the EU Member States)

• The interest shall not be treated as a receipt for the project for the purposes of determining the final grant

II.6. Payment modalitiesII.6. Payment modalities

– One pre-financing (45 days upon entry into force of GA)

– Interim payments based on financial statements (amounts justified & accepted)

– Retention 10% (PF + IP not beyond 90%)– Final payment (adjustments)

Certifications Certifications

Types of certificates:

• II 4.4 certificate on financial statements (CFS, Form D) expenditure verification - Mandatory base

(applies to a project)

• II 4.4 certificate on the methodology (Form E)

system verification – Voluntary base upon EC approval (applies to companies with multiple participation)

it only covers indirect costs

• II.14 certificate on average personnel costs (applies to companies with multiple participation)

N.B.: The submission of certificates does not affect the right to

carry out audits

Certification on Financial Statements Certification on Financial Statements

Summary:

• Form D - CFS: always if funding ≥375.000 € when cumulated with all previous payments

(if project > 2 years, if < only at the end)

• Form E - certificate on methodology:

no interim CFS but always at the end of the project

II.7. SubcontractorsII.7. Subcontractors

• SUBCONTRACTS

– To execute a limited part of projects (not the “core” part of the work)

– Tasks and costs estimation have to be indicated in Annex I

– Awarded according to best value for money principle

– Can be awarded under framework contracts

– No indirect costs can be charged on subcontract, only a price, inclusive of profit

II.14.1.f Third partiesII.14.1.f Third parties

a. Third parties making available resources

1. Free of charge (3rd party incurs the costs and declares them in Form C – specific section)

2. Beneficiary reimburses the third party(beneficiary itself declares the cost as belonging to him)

b. Third parties carrying out part of the work (SC n.10)

1. Relationship is broad and goes beyond: (i) the G.A. (e.g. ongoing previous agreement); (ii) the duration of the Project

2. Formal external recognition (legal structure or sharing facilities

Examples: European Economic Interest Grouping, Joint Research Units, affiliates and groupings (e.g. using the same laboratory)

NB: - Tasks and costs estimation have to be indicated in Annex I - Third parties shall also be validated in URF!!

II.9. ConfidentialityII.9. Confidentiality

• Confidential information: any data, documents or other material identified as confidential in relation to the project execution;

• Obligation lasts until 5 years after the completion of project or other period established in the consortium agreement;

• Classified information or information subject to security restrictions or export /transfer- control, must follow the applicable rules under the relevant national and Community legislation for such information

II.14. Eligible CostsII.14. Eligible Costs

– Eligible • Actual • Incurred by the beneficiary during duration of project• In accordance with beneficiary’s usual accounting and

management principles and recorded in its accounts• Used for the sole purpose of achieving the objectives of the

project• Proof should be available (time sheets)

– List of non-eligible costs under II.14.3

– Average personnel costs accepted if under a methodology approved by the Commission

II.15. Direct CostsII.15. Direct Costs

• No cost models (NEW)

• All beneficiaries report all their real direct costs even for permanent personnel costs

II.15. Indirect CostsII.15. Indirect Costs

• All beneficiaries: – Actual Indirect Costs– Simplified Method (to calculate indirect costs at the level of the legal

entity, and not at a detailed level) – Standard Flat Rate of 20% of direct costs

• Certain beneficiaries (Non-profit Public Bodies, Secondary and Higher Education Establishments, Research Organisations, SMEs) unable to identify real indirect costs, may apply for a Special Transitional Flat Rate of 60% of direct costs

• CSA limit of 7% of direct costs

II.16. Upper funding limitsII.16. Upper funding limits

Reimbursement according to type of organisation, action, activity

• Research and technological development activities: • up to 50% of eligible costs;• but up to 75% for Non profit public bodies, secondary and higher

education establishments and research organisations, SMEs

• Up to75% for security research RTD

• Demonstration activities: up to 50%

• Other activities including management: up to 100%

• Coordination and support actions: up to 100%

II. 20II. 20 Guarantee FundGuarantee Fund

• The Fund belongs to all beneficiaries of grant agreements under the FP7

• All beneficiaries contribute to the Fund to insure against financial losses of the project

• The contribution equals 5% of the Community financial contribution foreseen for each participant

• Deducted from the pre-financing

• Financial interest generated by the Fund will serve to cover financial risks

• In principle the amount contributed to the Fund will be reimbursed at the end of the action

Consequence: No bank/financial guarantee requested anymore

Liquidated damages and financial penaltiesLiquidated damages and financial penalties

• LIQUIDATED DAMAGES for beneficiaries that received an unjustified financial contribution from the Community (overstated amounts) is liable to:

– Pay back the unjustified financial contribution– Pay, in addition, damages liquidated in proportion to the overstated amount

– Formula: LD = unjustified Community financial contribution x (overstated amount/total Community financial contribution claimed)

• FINANCIAL PENALTIES for beneficiaries guilty of false declarations or who seriously failed to meet their obligations :

– Between 2% and 10% of contribution received– 4% and 20% if repeated offence within 5 years timeframe– Exclusion from all Community grants (max 2 years from the decision date)

Amendments to the GAAmendments to the GA

- Upon request of Coordinator or REA - Exchange of 2 letters following given templates:

Reply within 45 days (rule: tacit refusal, but approval if addition/withdrawal)

• NEW!! Information Letters for:– Universal transfer of rights & obligations– Change of legal name or details– Change of FP7 legal status (i.e. SMEs) and mistake in indirect cost

calculation

• Advantages:– Directly from the beneficiary to REA– One letter per beneficiary not per GA– Signature of contact person is enough

Much more in the GA and its explanatory documents ….

Thank you for your attention !