H2020 Forms of funding, types of actions and general rules

H2020 Forms of funding, types of actions and general rules
Ioannis Malekos DG CONNECT European Commission Nicosia, 2nd December 2013 Disclaimer : H2020 Regulations are not yet adopted by the legislator. Any information contained in this presentation is legally not binding

Disclaimer : legally not binding
Single set of rules Covering all research and innovation programmes, initiatives and funding bodies (eg what was FP7, CIP, ERA-NET,… but also EIT,…), but flexible to accommodate specificities where needed Coherent with the rules contained in the Financial Regulation (FR) Disclaimer : legally not binding

Forms of funding Grants Direct financial contribution by way of donation in order to finance an action Prizes Financial contribution given as reward following a contest Procurement Supply of assets, execution of works or provision of services against payment Financial instruments Equity or quasi-equity investments; loans; guarantees; other risk-sharing instruments Grants are 85 to 90% of funds. Financial instruments are 3,7% of funds. Financial instruments are: Loans for innovation (ref. in FP7 this is 1BEur): via the EIB: negotiates directly with companies for loans above 7,5MEur Via the EIF (RSI scheme targeting midcap and SMEs) : Call for expression of interest for banks. The EIF provides 50% of the loan guarantee (ie lowers the loan risk) Equity: via the EIF: the EIF provides VC money to VC funds after call for expression of interest and negotiation. This is up to 25% of the fund and is used to attract other institutional investors. EU finance week (run by ENTR/RTD/EIF) to help networking and making the link between investors and innovative companies. Ref. Enterprise Europe Network offices per MS. 15MEur earmarked for co-investement with Business Angels Procurement does not exist in the WP but it remains a possibility later. Disclaimer : legally not binding

GRANTS Disclaimer : legally not binding

Types of actions supported by grants
Research and innovation actions Innovation actions Coordination and support actions SME instrument Programme Co-fund ERANET Co-fund Pre-commercial procurement Co-fund Public procurement of innovative solutions Co-fund Summary of funding rates: R+I 100%, Inn 70% but 100% for non-profit, CSA 100%, SME instrument (Open and Disruptive Innovation, ODI) is part of the Inn therefore 70%, programn co-fund max 70%, current WP defines it at 33% for ERANET, at 70% for PCP and at 20% for PPI. Regarding PCP/PPI: R+I can have PCP/PPI but it cannot be its primary action. In program co-fund PCP/PPI are the primary actions. Example ICT8 CloudComputing. Example of ERANET co-fund: Ambient Assistant Living: call for subgrants. Disclaimer : legally not binding

Research and innovation actions
Actions primarily consisting of activities aiming to establish new knowledge and/or to explore the feasibility of a new or improved technology, product, process, service or solution. For this purpose they may include basic and applied research, technology development and integration, testing and validation on a small-scale prototype in a laboratory or simulated environment. Cost categories: Actual: acounted for costs Flat rate: % of something Unit: rate per hour, eg SME owners, or cost of engineer/hour for a certain company Lumpsum: estimate the cost and offer a lumpsum (we offer an amount that is the funding % of the estimeted cost) Disclaimer : legally not binding

Innovation actions Actions primarily consisting of activities directly aiming at producing plans and arrangements or designs for new, altered or improved products, processes or services. For this purpose they may include prototyping, testing, demonstrating, piloting, large-scale product validation and market replication. They must be about first application or deployment. They must be new in Europe or in the specific sector. Disclaimer : legally not binding

Coordination and support actions
Actions consisting primarily of accompanying measures such as standardisation, dissemination, awareness-raising and communication, networking, coordination or support services, policy dialogues and mutual learning exercises and studies, including design studies for new infrastructure and may also include complementary activities of networking and coordination between programmes in different countries. Same as before. Disclaimer : legally not binding

R+I, Innovation, CSA: example
H2020, WP , Leadership in enabling and industial technologies (LEIT) ICT : Technologies for creative industries, social media and convergence ICT19.a : R+I, 18MEur: Research in new technologies and tools to support creative industries in the creative process from idea conception to production (…) ICT19.b: Innovation, 21MEur: Demonstration of the viability of new technologies and validation of innovative solutions through large scale demonstrations, pilots or testing of use cases (…) ICT19.c: CSA, 2MEur: support program activities, dissemination of results, events organisation, (…) Deadline for all actions: 21/4/2015 Disclaimer : legally not binding

SME Instrument For single SMEs or SME consortia Phase 1: Feasibility study verifying the technological/practical as well as economic viability of an innovation idea Phase 2: Innovation projects that demonstrate high potential in terms of company competitiveness and growth underpinned by a strategic business plan. Phase 2 proposals should be based on a strategic business plan either developed through phase 1 or another means NEW! Note: Subcontracting to non-SMEs is allowed Phase 1: 6 months, 50K lumpsum financing (70% funding rate) of the viability study, business plan Phase 2: objective is to get to the market, very little research is expected Can either be done by phases 1 and 2 or going directly to phase 2 Phase 3 is indirect support: support to commercialisation, ie to provide coaching for phases 1 and 2. Either via a CSA or by using up to 2% of the call budget to hire coaches that wll be made available to SMEs via the Enterprise Europe Network locally in each MS. (EEN is supported now by CIP and will be supported by COSME in the future) An SME qualifies if it has a commercial ambition with EU dimension. This maens plans for commercial exploitation at EU or transnational level. Example ICT37 p77 Disclaimer : legally not binding

SME Instrument : example
H2020, WP , Leadership in enabling and industial technologies (LEIT) ICT37 : Open Disruptive Innovation scheme (implemented through the SME instrument) 45MEur per year, 10% phase 1, 88% phase 2, 2% coaching Opens 1/3/14 with multiple cut-off dates per phase, per year Phase 2 proposals should be based on a strategic business plan either developed through phase 1 or another means Open subject: “Proposed projects should have a potential for disruptive innovation and fats market up-take in ICT” Disclaimer : legally not binding

ERANET Cofund ERA-NET Cofund actions support public-public partnerships in their preparation, establishment of networking structures, design, implementation and coordination of joint activities as well as Union topping-up of a trans-national call for proposals. ERANET co-fund has merged ERANET and ERANET+ actions Typically the beneficiaries are the national funding agencies – we top up the transnational calls, in the WP with 33%. It is a cascading type of grant. Example: Ambient Assistant Living Disclaimer : legally not binding

Pre-Commercial Procurement (PCP) Cofund
PCP Cofund actions support the preparation, single joint procurement and implementation of contracts for research and development services and related additional coordination activities. 'Pre-commercial procurement’ means procurement of research and development services involving risk-benefit sharing under market conditions and competitive development in phases, where there is a separation of the research and development phase from the deployment of commercial volumes of end-products Both PCP and PPI: min 2 public buyers from a MS/AC that can be either the public sector or private entities that provide services of public interest and are controlled by the government (eg utilities). Additionally, other private entities may come as well as experts. Both PCP and PPI: can be done in 2 phases: Phase 1 from 6 to 12 months is the preparation phase, phase 2 is the execution phase PCP: To encourage RTD in areas of public interest: PCP identifies and area of interrest for the public and procures R&D in order to provide a solution. PCP is funded at 70% Disclaimer : legally not binding

Public Procurement of Innovative Solutions (PPI) Cofund
PPI Cofund actions support the preparation, single joint procurement and implementation of contracts for innovative solutions and related additional coordination activities. 'Public procurement of innovative solutions’ means procurement where contracting authorities act as a launch customer for innovative goods or services which are not yet available on a large-scale commercial basis. - To re-enforce early deployment of innovative solutions: PPI identifies needs where solutions are still in prototype or do not have the critical mass in the market place or are still too expensive and procures a solution as a first buyer. - PPI is funded at 20% Disclaimer : legally not binding

PCP/PPI : example H2020, WP , Leadership in enabling and industial technologies (LEIT) ICT8 : Boosting public sector productivity and innovation through cloud computing services ICT8.a : PCP, 9MEur: PCP for public sector cloud computing services. Proposals will define common requirements and terms of reference for future procurement of cloud computing services(…) ICT8.b: PPI, 13MEur: Public procurement for innovative cloud computing solutions. Proposals will focus on organizing joint procurement of innovative cloud services by public authorities to better and more efficiently run their services, serve their communities, their citizens and local businesses(…) Deadline for all actions: 21/4/2015 Disclaimer : legally not binding

Conditions for participation
Minimum conditions For standard collaborative actions At least, 3 legal entities, each established in different MS/AC For SME Instrument, programme co-fund, CSA 1 legal entity established in a MS/AC For Fast Track to Innovation Max. 5 participants Additional conditions To be set out in the Work Programme (i.e. number of participants, type of participants, etc.) These are only for GRANTS - Fast track to innovation will start as of 2015 and will be targeting SMEs. It will probably be run by an agency, have funding rate of 70% and have very light procedures to enable faster signature of the grant. Disclaimer : legally not binding

Eligibility for funding
Entities established in MS or associated countries or third country identified in the WP Entities created under Union law International European interest organisation Other entities may receive funding if : participation is essential or such funding foreseen in bilateral arrangement between the Union and third country/international organisation Change since FP7: Brasil, Russia, India, China and Mexico are no longer eligible for funding. SA is still eligible for funding. Disclaimer : legally not binding

Call for proposals Call for proposals shall be issued in accordance with the Financial Regulation and Rules of Application Exceptions to call for proposals : For CSAs and programme co fund actions to be carried out by entities identified in the work programme Rules regarding joint calls with third countries or international organisations Disclaimer : legally not binding

Evaluation of proposals
Award criteria Excellence Sole criterion for ERC frontier research actions Impact Higher weighting for innovation actions Quality and efficiency in the implementation Details, Weightings and thresholds to be laid down in WP Evaluation to be carried out by independent expert Possibility of a 2 stage submission procedure R+I / Innovation: more on the criteria: For oral discussion: 1. Excellence Clarity of the objectives; Soundness of the concept, including transdisciplinary considerations; Credibility of the proposed approach; Progress beyond the state of the art. 2. Impact: […] contribution to: The expected impacts listed in the work programme Enhancing innovation capacity and integration of new knowledge; Strengthening the competitiveness and growth of companies by developing innovations meeting the needs of European and global markets; …measures to, disseminate and exploit the project results,… communication. 3. Quality and efficiency of implementation Coherence and effectiveness of work plan, … allocation of tasks, resources; Competences, experience and complementarity of the individual participants, as well as of the consortium as a whole; Appropriateness of the management structures and procedures….risk management. Disclaimer : legally not binding

Scoring/weights/thresholds
Same: As in FP7 each criterion scored out of 5; individual threshold of 3; overall threshold of 10 New: Unlike FP7, for Innovation Actions and SME instrument… impact criterion weighted by factor of 1.5 Impact considered first when scores equal Disclaimer : legally not binding

Selection criteria Operational capacity (no specific provisions)
Operational capacity means that the applicants must have the professional competencies and qualifications required to complete the proposed action or work programme: it may be assessed on the basis of specific qualifications, professional experience and references in the field concerned. Financial capacity Only coordinator of actions equal or superior 500 kEUR, except specific cases No verification for public bodies , entities guaranteed by MS or AC and higher and secondary education establishments These are both going to happen during the evaluation by the experts. Front loading of these activities in the evaluation phase -no negotiation

Process to grant and signature of GA
Time to Grant From 9 (FR) to 8 months (Exceptions: ERC, complex actions, requested by applicants) 5 months for informing applicants on outcome of scientific evaluation 3 months for signature of GA = grant finalisation process Remarks : no changes of the composition of the consortium (removal or substitution needs to be duly justified) before signature of the grant agreement Disclaimer : legally not binding

Implementation of the action
Need to have the appropriate ressources Third parties may be called upon : Third parties carrying out work Subcontractors Third parties making resources available May involve PCP/PPI, but this cannot be the main aim of the grant Disclaimer : legally not binding

Consortium Coordinator = principal point of contact with EU Consortium agreement compulsary (exception : see WP) Rights and obligations Internal organisation Distribution of EU funding IPR provisions Internal disputes Liability, confidentiality, indemnification Same Indemnification= campensation against wrongdoing, αποζημιωση Disclaimer : legally not binding

Simplified Funding Model
1 reimbursement rate by action (same rate for all beneficiaries and all activities): Up to 100% for Research and Innovation actions (+CSA) Up to 70% for innovation (non-profit entities up to 100%) and programme co-fund actions. WP to specify the reimbursement rate (e.g 33% for ERA NET Cofund) 1 method for calculation of indirect costs: Flat rate of 25% of total direct costs, excluding subcontracting, costs of third parties and financial support to third parties Funding of the action not exceed total eligible costs minus receipts NEW : harmonized – big simplification - Examples of receipts Disclaimer : legally not binding

Maximum reimbursement rates Demonstration activities
One project = One rate Maximum reimbursement rates Research and technological development activities (*) Demonstration activities Other activities Network of excellence 50% 75% (**) 100% Collaborative project(****) Coordination and support action 100% (***) Same rate for all beneficiaries and all activities in the grant. The applicable rate will be defined in the Work Programme: Up to 100 % of the eligible costs; but limited to a maximum of 70 % for innovation projects (exception for non-profit organisations - maximum of 100%). (*) Research and technological development includes scientific coordination. (**) For beneficiaries that are non-profit public bodies, secondary and higher education establishments, research organisations and SMEs (***) The reimbursement of indirect eligible costs, in the case of coordination and support actions, may reach a maximum 7% of the direct eligible costs, excluding the direct eligible costs for subcontracting and the costs of resources made available by third parties which are not used on the premises of the beneficiary. (****) Including research for the benefit of specific groups (in particular SMEs) Disclaimer : legally not binding

20% ? 60% ? Real ? Simplified? Single model: 25 % Flat Rate Unique method: 25 % flat-rate Aiming at simplifying project management and reducing recurrent errors. Combined with practical guidance for large research infrastructures on how costs can be accepted as direct costs. Disclaimer : legally not binding

New funding model: what impact on the EU contribution? Example: In FP7, around 90 % of the Universities and more than a half of the Research Organisations apply the 60 % flat-rate for indirect costs. For all these participants the impact on the EU contribution of the H2020 funding model will be favourable: Direct costs Indirect costs Total costs % EU contribution EU contribution Flat-rate (60 %) 100 60 160 75% € 120 Direct costs Indirect costs Total costs % EU contribution EU contribution 100 / 25 Funding 100 25 125 100% € 125 Disclaimer : legally not binding

Eligible costs General reference to eligiblity criteria laid down in the FR/RAP. Specific provision regarding personnel costs, subcontracting and costs of third parties. Cost categories mentioned in the GA. Costs: Direct – indirect Actual – flat rate – unit – lumpsum Personnel – subcontracting – travel – depreciation – proc/nt of services or goods Disclaimer : legally not binding

Personnel costs (1) Salaries + social security charges + other costs included in the remuneration arising from national law/employment contract Additional remuneration up to 8000 EUR (per year) for non-profit legal entities Actual worked hours Evidence : normally through time recording system except for staff working full time on EU action Wider acceptance of average personnel costs (now under unit costs) Broadening the basic conditions for acceptance of average personnel cost accounting practices (including cost-centre approaches). Acceptance of supplementary payments for non-profit organisations of up to 8000 Euro/year/person Simplifying participation for SMEs Providing in the Rules for a unit cost system for SME owners and physical persons without a salary. Less requirements for time records No time records for researchers working exclusively on the project. Simplified provisions on annual productive hours Two options: 1720 hours or usual cost accounting practice subject to a minimum threshold. Disclaimer : legally not binding

Personnel costs (2) Actual costs Unit costs for average personnel costs Calculation based on the total actual personnel costs recorded in the participant's accounts Provisions on productive hours SME owner and natural person with no salary Actual or unit: Cost per unit of work (like an hourly rate): ie the unit used to calculate costs in an entity. It has to be actual-based but it can also include forecast or budgeted costs. Must usual acounting practice. Explanations not yet available. Please refer to the articles in the GA which is still in draft, to be published mid December. Disclaimer : legally not binding

Subcontracting Subcontracts' costs may be eligible if foreseen in Annex 1 of the grant agreement Not foreseen in Annex 1 only "in duly justified cases that could not be clearly foreseen at the time of its entry into force" WP may impose further requirements for subcontracting Disclaimer : legally not binding

Costs of third parties Carrying out work, costs may be eligible if Third party eligible for funding Affiliated or legal link with a beneficiary Identified in the GA Abides by the rules (inter alia on costs eligiblity and control) applicable to the beneficary Accepts – if requested by EU - Joint and several liability with the participant Making resources available, costs may be eligible if conditions of the GA are met, Making resources available against payment or free of charge. 4 kinds of 3rd parties: Subcontracting 3rd party = claiming cost, same rules as for beneficiary, either A. gives resources or B. executes work Cascading = financing further entities, either as grants, or prizes Disclaimer : legally not binding

Controls and audits Audit certificates Only for final payments when total EU contribution claimed on the basis of actual costs +average personel costs ≥ 325,000 EUR Certificates on the methodology Optional certificates on average personnel costs Ex-post audits Audits limited to 2 years after payment of the balance This refers to cost claim funding, not lumpsums. 325 refers to claimed funding; personnel cost only all included. Disclaimer : legally not binding

Guarantee Fund Continuity of the system applied in FP7 : H2020 GF replaces and succeedes to the FP7 GF Considered as sufficient guarantee under the FR No additional guarantee or security may be accepted from participants or imposed on them 5% contribution of the EU funding retained from the initial prefinancing 5% contribution returned to participants at the end of the action Disclaimer : legally not binding

Intellectual Property Rights (IPR)–in a nutshell - Results
Ownership Beneficiary generating the results Joint-ownership in specific circumstances Protection If results capable of commercial/industrial exploitation If no protected, EU may assume ownership Exploitation Best efforts obligation; WP may foresee additional obligations Transfer and exclusive licences to a third country EC may object (competitiveness, ethical principles, security) Dissemination Open access to scientific publications and under certain conditions to research data Same as in FP7 except Open access: It is now obligatory 1. Scientific publications: when made they must be either available to the public after 6 months or immediately for a fee to the publisher (eligible cost) 2. Research data: this is a pilot to be done only for specific areas of the WP Special to PCP-PPI: Art.49 of the RfP (aslo int he Model GA): Procurers: they have the right to use but also to ask for additional licences to be given for a fair price to other players in the market. Syppliers: they own the PR. However, if they do not use it or if they abuse it the producers can recal the IPR. Disclaimer : legally not binding

IPR in a nutshell– Access Rights
For implementation To background / results (royalty free) if needed For exploitation To background / results (under fair and reasonable conditions) if needed to exploit own results Also applicable to affiliates established in MS/AC For EU/MS Non-commercial use and policy related purpose (under "Secure societies") On a royalty-free basis For third parties Specific provisions for complementary beneficiaries, access to research infrastructures, interoperability Same Disclaimer : legally not binding

PRIZES

Prizes Prizes may be used to Recognise past achievements (“recognition prizes”), or Induce future activities, (“inducement prizes”) Prizes must comply with the principle of equal treatment and transparency on the basis of procedures comparable to the ones applying to grants, with 2 exceptions: Prizes may never be awarded without a contest Prizes may not be fully outsourced to external contractors Inducement = παρακίνηση, ενθαρρυνση, προτροπή Disclaimer : legally not binding

Prizes – Examples H2020, WP , Leadership in enabling and industial technologies (LEIT) Other actions : Inducement prizes "Breaking the optical transmission barriers in the core network": exceeding 1Tb/s per channel on optical networks "Collaborative sharing of specrtum": demonstrating methods providing empowerment of local user communities with decentralised spectrum management capabilities Publication : expected Q3/2014 Opening : expected Q4/2014 Deadline : Exepcted Q4/2015 Budget : 500KEur per prize EU prizes my not be fully outsourced! The Commission or an Agency must execute them. Not the ones inside grants, ie cascading. Disclaimer : legally not binding

EXPERTS

Independent experts Evaluate, advise, assist on Evaluation of proposals Monitoring of actions Implementation of H2020 Implementation and design of R&I policy including preparation of future programmes. Evaluation of R&I Programmes Reviews are now called monitoring Disclaimer : legally not binding

Independent experts (2)
Skills, experience and knowledge Identification and selection on the basis of calls for applications Balanced composition Conflict of interest Names published 1/year on website Disclaimer : legally not binding

Questions? For more visit: ec.europa.eu/research/horizon2020
Disclaimer : legally not binding

H2020 Forms of funding, types of actions and general rules

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H2020 Forms of funding, types of actions and general rules

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