— Approval without formal amendment
The third parties, their kind contributions and an estimation of the costs budgeted for the in-kind contributions must be mentioned in Annex 1 to the GA.
If the need for third parties’ in-kind contributions was not known at the moment of the signature of the GA, the coordinator must request an amendment of the GA in order to introduce it in the Annex 1. Exceptionally, the Commission/Agency may approve costs related to the payment of in-kind contributions not included in Annex 1 without formally amending the GA (under the conditions set out in this Article).
For more information on approvals without formal amendment, see Article 11.
4. Additional eligibility condition: Controls on the third parties (by the Commission/Agency, ECA and OLAF) — Evaluation of the impact of the action
The beneficiaries must ensure that the Commission/Agency, the European Court of Auditors (ECA) and the European Anti-Fraud Office (OLAF) have the right to carry out checks, reviews, audits and investigations on the third parties (see Article 22), and in particular to audit their costs.
They must also ensure that the Commission/Agency has the right to make an evaluation of the impact of the action under Article 23.
It is the beneficiaries’ responsibility to ensure that this obligation is accepted by the third party (for example, if they refuse access and the Commission/Agency cannot verify the eligibility of the costs, it will reject them).
ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS 13.1 Rules for subcontracting action tasks
13.1.1 If necessary to implement the action, the beneficiaries may award subcontracts covering the implementation of certain action tasks described in Annex 1.
Subcontracting may cover only a limited part of the action.
The beneficiaries must award the subcontracts ensuring the best value for money or, if appropriate, the lowest price. In doing so, they must avoid any conflict of interests (see Article 35).
[OPTION: In addition, if the value of the subcontract to be awarded exceeds EUR […], the beneficiaries must comply with the following rules: […].22]
[OPTION for actions involving PCP or PPI: In addition, for the pre-commercial procurement (PCP) or procurement of innovative solutions (PPI), the beneficiaries must follow a transparent and non-discriminatory procedure, including at least the following:
(i) an ‘open market consultation’ published in the Official Journal of the European Union via a
‘prior information notice (PIN)’ and promoted and advertised widely;
(ii) a ‘contract notice’ allowing for a time-limit for receipt of tenders of at least 2 months, published in the Official Journal of the European Union and promoted and advertised widely;
(iii) a ‘request for tenders’ based on functional or performance-based specifications (that take into account the outcome of the open market consultation) and describing the practical set-up for the implementation of the subcontract(s);
(iv) an objective and non-discriminatory evaluation of the tenders and award of subcontract(s) to the tender(s) offering best value for money;
(v) a ‘contract award notice’ published in the Official Journal of the European Union.
The beneficiaries must also ensure that every prior information notice, contract notice or contract award notice published in relation to the subcontracting includes the following disclaimer:
“This procurement receives funding under the European Union’s Horizon 2020 research and innovation programme under the grant agreement No [number]). The EU is however not participating as a contracting authority in this procurement.”]
[OPTION only for actions involving PPI: Participation in PPI tendering procedures must be open on equal terms to tenderers from EU Member States, associated countries and other countries with which the EU has an agreement in the field of public procurement. If the WTO Government Procurement Agreement applies, PPI subcontracts must also be open to tenderers from States that have ratified this agreement.
If the procurement of the innovative solution (PPI) consists (and is limited to) buying a set of prototypes and/or test products that were developed during a preceding PCP Cofund action, the beneficiaries do not need to make an open market consultation, contract notice and contract award notice under Points (a), (b) and (e) above. In this case, they must make a request for offers from at least three providers (including the providers that participated in the preceding PCP), in accordance with the negotiated procedure without publication under Directives 2004/18/EC and 2004/17/EC 23.]
[OPTION only for actions involving PCP: The subcontracts for pre-commercial procurement must provide for the following:
- the ownership, by the subcontractors, of the intellectual property rights on the results that they generate;
- the right of the buyers to access results — on a royalty-free basis — for their own use;
- the right of the buyers to grant (or to require the subcontractors to grant) non-exclusive licences to third parties to exploit the results — under fair and reasonable conditions — (without the right to sub-licence);
- the obligation of the subcontractors to transfer back to the buyers the ownership of intellectual property generated by subcontractors during the PCP, if subcontractors fail to commercially exploit the results within the period set out in the subcontract;
- the right of the buyers to publish — at the time of the contract award notice — the identity of the winning tenderers and a project summary provided by the winning tenderers, and to publish — after R&D has finished and after consulting the subcontractors — summaries of the results as well as the identities of the subcontractors that successfully completed the last phase of the PCP.
The beneficiaries must ensure that the majority of the research and development work done by the subcontractor(s) (including the work of the main researchers) is located in the EU Member States or associated countries (‘place of performance obligation’).]
The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1 and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The [Commission][Agency] may however approve subcontracts not set out in Annex 1 and 2 without amendment (see Article 55), if:
- they are specifically justified in the periodic technical report and
- they do not entail changes to the Agreement which would call into question the decision awarding the grant or breach the principle of equal treatment of applicants.
[OPTION for classified deliverables: Classified deliverables may be subcontracted only after explicit approval (in writing) from the [Commission][Agency] (see Article 37).]
The beneficiaries must ensure that the Commission [and the Agency], the European Court of Auditors (ECA) and the European Anti-fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also towards their subcontractors.
13.1.2 The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply to the subcontractors.
Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC or
‘contracting entities’ within the meaning of Directive 2004/17/EC must comply with the applicable national law on public procurement.
13.2 Consequences of non-compliance
If a beneficiary breaches any of its obligations under Article 13.1.1, the costs related to the subcontract concerned will be ineligible (see Article 6) and will be rejected (see Article 42).
If a beneficiary breaches any of its obligations under Article 13.1.2, the grant may be reduced (see Article 43).
Such breaches may also lead to any of the other measures described in Chapter 6.
22 If the authorising officer decides to set specific rules, they should have due regard for the principle of proportionality taking into account the value of the contracts and the relative size of the EU contributions in relation to the total cost of the action and the risk. Specific rules must be based on the rules contained in the Financial Regulation. Simply citing the FR without specifying the applicable provisions should be avoided. Specific rules may only be set for the award of contracts of a value higher than EUR 60 000. The authorising officer may set a threshold higher than EUR 60 000 on the basis of a risk assessment.
23 See Articles 28 and 31(2)(a) of Directive 2004/18 and Article 40(3)(b) of Directive 2004/17/EC