Overview of contracts Ingrid Mariën-Dusak Information Day for Coordinators 17 July 2003

Overview Legal framework and general principles Contract structure Conclusion of the contract Evolution of the consortium Reporting Amendments Collective responsibility Controls and sanctions Consortium agreement Intellectual property rights Special clauses Specificities of instruments

Legal Framework EC TREATY CONTRACTS INTERNATIONAL AGREEMENTS PARTICIPATION AND DISSEMINATION RULES FRAMEWORK PROGRAMME CONTRACTS SPECIFIC PROGRAMMES GUIDELINES ON EVALUATION AND SELECTION PROCEDURES Other relevant EC Regulations FINANCIAL REGULATION WORK PROGRAMMES & Calls for proposals

General principles Reflect requirements of the Legal Framework Simplification No different categories of contractors Reduction of the number of contracts Greater flexibility Evolution of the project Composition and changes to consortium Greater autonomy for participants = Collective approach

Proposal submission and evaluation Contract structure Proposal submission and evaluation 05/04/2017 Core contract (standard with specifics of project) (possibly including special clauses) Annex I (technical tasks - the “project”) Annex II General Conditions (applicable to every instrument) Annex III Instrument specific provisions (specific to instrument) Presentation IP - Heysel

Annex II Part A Implementation of the Project Section 1 Implementation and deliverables Section 2 Termination of the contract and responsibility Part B Financial Provisions Section 1 General financial provisions Section 2 Controls, recoveries and sanctions Part C Intellectual Property Rights

Contract structure & instruments Core contract Annex II Annex III IP Yes NoE Yes STReP CA Common Common None SSA SME Yes I3 Yes

Contract structure Annex IV - Form A Annex V - Form B Consent of contractors identified in the core-contract (article 1.2) to accede to the contract. To be signed by the contractor concerned and by the coordinator. Annex V - Form B Accession of new legal entities to the contract. To be signed by the new contractor concerned and by the co-ordinator Annex VI - Form C Financial statement per activity. Specific to each Instrument and/or type of action. To be filled periodically by each contractor

Contractors New Every legal entity that contributes to the project (incl. Project Managers) General Rule: Participant = contractor Every legal entity contributing to a project must have a contractual link with the Community Exceptional cases: subject to very restrictive rules Third parties identified in Annex I Subcontractors

Co-ordinator A contractor among other contractors No additional rights BUT Additional obligations Administrative tasks: single entry point for communication, payments, reporting etc.

Conclusion of the contract 1/2 The contract will be concluded between the Commission and all participants in an indirect action (the ‘Consortium’). It will enter into force upon signature by the Commission and the contractor acting as ‘Co-ordinator’ of the project. The other participants identified in the contract will accede to it in accordance with Article 2, assuming the rights and obligations of the contract with effect from the date on which it enters into force.

Conclusion of the contract 2/2 Within a fixed time-limit after the entry into force of the contract, the Coordinator must send to the Commission the Accession Form A to be obtained from each of the participating contractors. Should any named participant fail or refuse to accede to the contract within the deadline, the Commission is no longer bound by its offer. It may terminate the contract. The Consortium may propose appropriate solutions to the Commission to ensure the implementation of of the project, including the accession of other alternative legal entities.

Evolution of the Consortium 1/2 The Consortium may be enlarged to include other legal entities, which shall accede to the contract by means of Accession Form B. The Commission is deemed to have accepted this legal entity as a contractor to the Consortium if it does not object within six weeks of receipt of Form B (Tacit Approval). Any acceding participant shall assume the rights and obligations of the contractors as established by the contract with effect from the date of its accession to the contract.

Evolution of the Consortium 2/2 Any contractor may request the termination of its participation in the contract. The consortium may request the participation of any contractor. Tacit approval of such termination after six weeks. Contractors leaving the Consortium shall be bound by the provisions of the contract regarding the terms and conditions applicable to the termination of their participation.

Entry into force and duration Contract enters into force upon signature of Co-ordinator and Commission Project begins on date established in the contract Implementation and payment phases relating to the project must be completed by the final implementation date of the contract Contract completed when the rights and obligations of all parties to the contract have been met Some provisions continue to apply after the final implementation date

Reporting 1/2 Submission of periodic reports and deliverables within 45 days of the end of the reporting period periodic activity report periodic management report (including justification of resources deployed, Form C “Financial Statement”, consolidated summary financial report) report on distribution between contractors supplementary reports required by Annex I audit certificate when required c Amendments - tacit for approval of project activity reports and for consortium changes Special conditions* * under development

Reporting 2/2 Submission of final reports within 45 days after the end of the project. Delay may be increased by 45 days at the request of the consortium final activity report final management report supplementary reports report on the distribution of the Community financial contribution between contractors made after the end of the project

Submission and approval of reports Electronic submission of reports and deliverables. In addition, submission of originals of these documents and of audit certificates by registered mail with acknowledgement of receipt. Reception date of submission by mail prevails Approval of any report does not imply exemption from any audit or review

Amendments Requests for amendments shall be submitted by registered mail with acknowledgement of receipt Requests for amendments are submitted by the Coordinator on behalf of the consortium Commission undertakes to approve or reject any amendment request within 45 days of receipt No tacit approval of amendment request, except for modification or evolution of the consortium All amendments shall be in writing

General conditions of the contract Performance obligations for consortium, contractors, co-ordinator, Commission Force Majeure Suspension and prolongation the Consortium can propose to suspend the project in case of execution experiences strong difficulties or is uneconomic, if force majeure or exceptional circumstances the project the Commission may suspend the project when the consortium is not performing satisfactory, in order to re-negotiate and propose necessary amendments Termination any contractor may request the termination of its participation/the Consortium may request to terminate the participation of any contractor in both cases “Where the Commission does not object within six weeks, it is deemed to have approved the request” by the Commission in case legal, financial, organisational or technical change, change of control, ...

Collective Responsibility of Contractors 1. Technical Collective Responsibility - Article II.17 Each contractor obliged to take all necessary measures to attain the objectives of the project and to carry out the work incumbent on the defaulting contractor 2. Financial Collective Responsibility - Article II.18 Should either the contract or participation of a contractor be terminated and any contractor does not honour the reimbursement of the amount due by that contractor, the Consortium is responsible to reimburse that amount to the Commission Amount to be recovered to be allocated between the remaining contractors in accordance with their pro rata share in the project

Controls and Audits Controls Audits Periodic activity reports (including plan for dissemination and use) Periodic financial reports Supplementary reports if foreseen (in Annex I or III) Final reports covering the whole project duration Audits Scientific, technological and financial audits Annual monitoring by Commission with external experts (particularly for IP and NoE) Ethical or other reviews Contractors right to refuse particular expert

Sanctions Irregularity is grounds for exclusion from evaluation or selection procedure Liquidated damages for overclaims Administrative or financial sanctions foreseen in the Financial Regulation Financial penalties for grave/repeated breach of contractual obligations Without prejudice to any civil remedies or criminal proceedings Recovery orders

The Consortium Agreement 1/3 Characteristics: Private Contract between the contractors Provides for internal operation and management of the consortium Commission does not review it or approve it However, provisions must not conflict with provisions of EC Contract May be modified/amended after entry into force Non-binding guidelines published by the Commission

Proposal submission and evaluation The Consortium Agreement 2/3 Proposal submission and evaluation 05/04/2017 Why: Mandatory unless excluded by the call for proposals Management of the consortium distribution of funds paid to the consortium (via the co-ordinator) no automatic pre-allocation of the funds among contractors: to be decided by the consortium evolution of the work programme organisation of work to be carried out (sub-projects) reports presented and submitted by the consortium (via the co-ordinator) evolution of the consortium’s composition (modification) IPR issues: should be agreed before signature of the contract (mandatory for specific pre-existing know how exclusion) Global Risk Management: collective responsibility - technical implementation of the action = collective responsibility of the contractors consortium to deal with breach of contract / non-performance and imposition of financial collective responsibility and any financial security necessary for same Presentation IP - Heysel

Proposal submission and evaluation The Consortium Agreement 3/3 Proposal submission and evaluation 05/04/2017 Issues: Decision-making process and dispute settling IPR ensure that agreements necessary for the implementation of the project have been reached - exclusion of background/sideground initiate common strategy on dissemination/use/ protection + search for industrial partners Global Risk Management establish internal auto-control & a checks and balances mechanism (periodic distribution of the funds, progress reporting, etc.) specific issues regarding competitive calls, costs less than EC funding, etc. for specific instruments Presentation IP - Heysel

Intellectual Property Rights (IPR) 1/3 Developed on the basis of feedback from FP 5 features of the “new instruments” contractors may leave/join during the project “larger” projects Principles consistency with FP 5 (similar concepts) simplification new same IPR rules for ± all instruments (fewer exceptions) new same IPR rules for all contractors increased certainty, in particular regarding access rights (restricted to what is necessary) increased emphasis on the management of knowledge and IP (especially new instruments)

Intellectual Property Rights (IPR) 2/3 General concepts: definitions: no major changeS compared to FP 5 “knowledge”, “pre-existing know-how”, “use”, “dissemination”, … ownership: no major changes compared to FP 5 resides with the contractor (including JRC) generating knowledge transfer of ownership: prior notice to other participants + Commission (possible objection within 30 days) public procurement (Commission owns results) Protection where there is commercial application and subject to legitimate interests, it is a requirement to protect where there is no protection, Commission may protect

Intellectual Property Rights (IPR) 3/3 General concepts: Publication allowed if not detrimental to protection prior notice to Commission + other contractors (possible objection within 30 days) Use/dissemination obligation to use and disseminate Commission may disseminate itself if needed

FP6 System of Access Rights Access rights to pre-existing know-how knowledge If a contractor needs them for carrying out its own work under the project For carrying out the project Royalty-free unless otherwise agreed before signing the contract If a contractor needs them for using its own knowledge For use (exploitation + further research) Non-discriminatory conditions to be agreed unless otherwise agreed before signing the contract Possibility for participants to agree on exclusion of specific pre-existing know-how before signature of the contract (or before entry of a new participant)

Article 9 Special clauses * Participation by the JRC EEIG, JRU and SME Associations International organisations Complementary contracts Sole contractor clause for SSA that may become pluri-contractors Sole contractor that cannot be pluri-contractors Mid-term review clauses Payment of the contractor’s pre-financing, subject to obtaining a financial guarantee Exoneration of Financial collective responsibility Reimbursement of less than 100% for SSA Signature of a consortium agreement as prerequisite to beginning of project Ineligibility of costs incurred in relation to an activity * draft

Article 9 Special clauses Increase of the EC financial contribution - only for SSA under article 9.2.a Contractors with flat rate overheads of less than 20% Contractors with no eligible costs (e.g. Third countries) Ethical rules Clinical research Specific support actions involving Transnational Acces Cases where other enterprises and/or end-users participate Delayed accession of contractors established in a new Member State to contracts entering into force between the 01.01.2004 and the 31.01.2004 due to Article 32 of the Accession Treaties Projects with only one reporting period

Annex III - Integrated projects Competitive calls Publication requirements Evaluation of offers Accession of new contractors Objections by the Commission within 6 weeks Contract amendment Updating the implementation plan Annual review

Annex III - Networks of excellence Community financial contribution Competitive calls Updating the joint programme of activities Annual review Failure of annual review