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Third parties & other sensitive relations

Link with the project Legal situations

Carry out the projects (core tasks)

1. Beneficiary

Carry out ancillary tasks2. A third pary working as a sub-contractor

3. A third party linked to a beneficiary working under special clause 11

Give access to some resources (staff, lab)

4. A third party making available ressources for free

5. A third party making available ressources and being reimbursed by the beneficiary

Sell (lease) equiment 6. A supplier

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2. Subcontracts

– Who ? • Works under business conditions with profit purpose • Not subordinated to nor under supervision of beneficiary • Not another beneficiary• Not an affiliate

– In What Conditions ?• A limited and non core part of the project

• Not R&D

• Not the coordinator’s tasks

• Tasks and amount indicated and justified in technical annex • Beneficiary remains reponsible• If Intellectuel Property , it must belong to beneficiary• Best value for money, transparency and equal treatment

Several bids (or public procurement) Except for pre-existing framework agreement

3.Third parties carrying part of the work under special clause 11

– Who ? • EEIG, Joint research unit, affiliates and groupings carrying out part

of the work.

Common error: 3rd party not identified in the GA with SC-11

– In what conditions • tasks to be indicated in Annex I • Beneficiary retains sole responsibility • Financially, third party treated as a beneficiary

Common error: Costs claimed by the beneficiary whereas incurred by the 3rd party and recorded in its accounts.

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4 & 5. Third parties making available resources

• Who ? – Typical example : a third party giving access to its lab and lab staff. – Provided either free of charge or against reimbursement

• In what conditions can it be charged to the FCH JU ?4. free of charge.

• Indicated in Annex I• costs are recorded in the accounts of the 3rd party and auditable, • costs also declared as as receipt. • Common errors:

• receipts not declared, • indirect costs are claimed for personnel made available from a third party

to a beneficiary but not working in the premises of the beneficiary.

5. Against reimbursement• Indicated in Annex I• Reimbursement recorded in the accounts of the beneficiary • Common error:

• the 3rd party reimbursement includes not only costs but margin (profit)7

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• Notion– Purchase (or lease) of equipment.– Transfer of ownership (control) from supplier to beneficiary– GA conceived on the idea that

• main costs = personnel costs • while purchase of equipment is ancillary => no clear rules

– But in demo project it can be the contrary => need to clarify the rules for purchases above 125.000 EUR

• Principle of best value for money – For public entities: public procurement rules

– For private entities if purchase is >125.000 EUR• Or request three offfers• Or use pre-existing framwork agreement• Or another detailed explanation of the reasons only one possible supplier

=> In option 2 and 3: better to have a discussion with FCH JU before and to document what is agreed to ensure legal certainty.

6. Supplier of equipment

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Is it possible to purchase equipment from an affiliate or another beneficiary?

•2 scenarios: 1. Purchase from another beneficiary or affiliate under special clause 11

• i.e purchase from s.o. working in the project

2. Purchase from an affiliate that provides only the equipment • i.e purchase from s.o. NOT working in the project

•Possible if1. Building the equipment is not an objective of the project

1. Otherwhise « builder » should be a beneficiary & declare its costs (not purchase price)

2. Purchase complies with rules for « Best value for money »

3. Additional information requirement1. When: Only If three conditions are fulfilled

– Purchase from affiliate– Value of the puchase >1/3 of beneficiary cost – Purchase is project specific

• Why: assess reasonabless of the « purchasing price » (best value for money)

• What: breakdown of price per costs categories + possibility to request some invoices from third parties NOT AN AUDIT

6. Supplier of equipment

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• How to declare the costs ?

– Costs to be declared by beneficiary in its form C as « other

costs »

– Costs must reflect percentage of use in the project

– Costs must reflect depreciation

6. Supplier of equipment

Affliliate

With SC 11

Affliliate

Within consortium Out of consortium

Builds itself

Purchases from

additional /information

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Receipts

The non profit principle•Three kinds of receipts must be taken into account

1. Transfers from third parties to the beneficiary – if specifically attributed to the project and not reimbursed– Financial transfers and contributions in kind

2. Income generated by the project – but not income generated by the use of foreground

3. Interest generated by the pre-financing • on account of coordinators , • related to other beneficiaries share • ≠FP7

•At final payment the FCH JU contribution will take into account any receipts of the project

– For each beneficiary: – the eligible costs ≥ FCH JU contribution + the receipts for

the project