1. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°1 Model Contract (*) for the Sixth Framework Programme (*) except for actions to promote human resources and mobility

2. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°2 EC TREATY FRAMEWORK PROGRAMME SPECIFIC PROGRAMS PARTICIPATION AND DISSEMINATION RULES CONTRACTS Other relevant EC Regulations: e.g. EC Financial Regulations (Budgetary Law) INTERNATIONAL AGREEMENTS Introduction: 0.1- Legal framework

3. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°3  Based on the rules for participation and dissemination of results and collective approach greater flexibility greater autonomy of participants reduction in the number of contracts Introduction: 0.2- General contractual principles

4. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°4 Introduction: 0.3.1- Contract Structure  Core-contract  Standard text completed with project data (+ special clauses)  Annex I  The “project” (technical tasks - work to be carried out)  Annex II  General conditions (standard text applicable to every instrument, excepting actions  to promote human resources and mobility)  Annex III  Specific provisions for some instruments (standard text)

5. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°5 Introduction: 0.3.2- Contract Structure  Annex IV - Form A  Consent of contractors to accede to the contract (standard text completed with  project data - To be filled in by each contractor identified in the core-contract (article  1.2) - To be signed by the contractor concerned and by the coordinator)  Annex V - Form B  Accession of new legal entities to the contract (standard text completed with project  data - To be filled in by each new participant willing to become contractor - To be  signed by the new contractor concerned and by the coordinator)  Annex VI - Form C  Financial statement per activity (Specific to each instrument and/or type of action -  To be filled periodically by each contractor)

6. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°6 Introduction: 0.4- Guidelines  Different guidelines will provide supplementary information and guidance notes: Financial guidelines (including cost models, audits, …) Negotiation guidelines (including technical annex, contract preparation,...) Consortium agreement guidelines (including IPR,...) Project management guidelines (including reporting,...)  Plus guidelines explicitly required by the rules for participation and dissemination of  results: Guidelines on evaluation and selection procedures

7. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°7 Introduction: 0.5- Consortium Agreement  Compulsory, unless exempted by the call for proposals  No model but non binding guidelines provided by the Commission  Regulates internal organisation and management of consortium (Commission  is not a party)  After or (preferably) before signing the contract.  Some decisions must be made by the participants before signature of contract  (e.g. exclusion of pre-existing know-how)  By definition, contractors are supposed to have a consortium agreement.

8. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°8 1- Core-Contract 1.1- Structure  The structure of the core-contract is the following: Article 1 - Scope Article 2 - Constitution of the Consortium Article 3 - Evolution of the consortium Article 4 - Entry into Force of the Contract and Duration of Project Article 5 - Community financial contribution Article 6 - Reporting periods Article 7 - Reports Article 8 - Payment modalities Article 9 - Special clauses Article 10 - Amendments Article 11 - Communication Article 12 - Applicable law Article 13 - Jurisdiction Article 14 - Annexes forming an integral part of this contract

9. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°9 1- Core-Contract 1.2.1- Main issues  Signature and entry into force of the contract Contractual link of all contractors with the Commission (equal status) Contract enters into force upon signature of coordinator and Commission Coordinator must ensure other contractors sign within delays (established in contract) (Confere Form A) Distribution of advance (pre-financing) to other contractors possible after minimum requirements met Project begins on date established in the contract

10. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°10 1- Core-Contract 1.2.2- Main issues  All the contractors are identified in the core contract [article 1.2]  Evolution of consortium possible: where one or more does not sign the Form A [article 2] in case of enlargement (new contractors) [article 3]  Explicit mention of the type of Community financial support [article 5] lump sum grant to the budget grant for integration  Maximum Community financial contribution [article 5] and estimated breakdown of costs and activities [Annex I]

11. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°11 1- Core-Contract 1.2.3- Main issues

12. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°12 1- Core-Contract 1.2.4- Main issues  Reporting periods are clearly established in the core-contract [article 6]  The following reports must be submitted for each reporting period within 45 days after the end of the concerned reporting period [article 7.1 + Annex II.7.2]: Periodic activity report (including plan for using and disseminating the knowledge) Periodic management report (including a justification of resources deployed + Forms C + summary financial report consolidating the claimed costs) Periodic report of the distribution between contractors of the Community financial contribution Any supplementary reports required by any Annex of the contract (Annexes I and III)

13. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°13 1- Core-Contract 1.2.5- Main issues  An audit certificate per contractor must be submitted for each reporting period within 45 days after the end of the concerned reporting period [article 7.2 + Annex II.7.3] for IP and NoE.  For other instruments, an audit certificate per contractor must be submitted at the latest 45 days after the end of the specific periods established for this purpose in the contract [article 7.2 + Annex II.7.3]  Even though an audit certificate is not required for a specific period, an audit certificate must be provided by each contractor requesting a Community financial contribution exceeding 750.000€. [article 7.2 + Annex II.7.3]

14. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°14 1- Core-Contract 1.2.6- Main issues  In addition to the reports for the last period, the following reports must be submitted at the latest 45 days after the end of the project [article 7.3 + Annex II.7.4]: Final activity report (including plan for using and disseminating the knowledge) Final management report Final report of the distribution between contractors of the Community financial contribution Any supplementary reports required by any Annex of the contract  Payment modalities (pre-financing and payment) [article 8 + Annex II.28]: Differences between : Projects with one single reporting period Projects with several reporting periods  with an audit certificate for each reporting period  without an audit certificate for each reporting period Lump sum support

15. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°15 Payments and reporting schedule for an IP (example of a 4 year contract) Activity report Reported costs Activity reportDetailed work plan Reported costsAdjusted advance Activity reportDetailed work plan Reported costsAdjusted advance Activity report Reported costs Detailed work plan Adjusted advance Detailed work plan Initial advance 0 6 12 18 24 30 36 42 48 Months 1- Core-Contract 1.2.7- Main issues

16. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°16 1- Core-Contract 1.2.8- Main issues Payments and reporting schedule for a STREP, CA or SSA (example of a 3 year contract) Final activity report Reported costs + audit certificate (mandatory) Final payment Periodic activity report (mid-term review : optional) Reported costs + (audit certificate if required) Intermediate payment/ settlement Detailed work plan Initial advance 0 6 12 14 18 20 24 26 30 36 38 Months

17. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°17 1- Core-Contract 1.2.9- Main issues  The core-contract may content some special clauses [article 9]: Some of them may be imposed (e.g.: specific cost models rules for specific activities consisting in transnational access for an SSA - Infrastructures) Others, answering to specific situations will be at the disposal of the contractors  Amendments [article 10 + Annex II.8]: General rule: request in writing Tacit amendments: only for modification and evolution of the consortium ; and for technical reports  The law of Belgian or Luxembourg govern the contract [article 12]

18. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°18 2- Annex II - General conditions 2.1- General Structure  The structure of the Annex II is the following: Article II.1 - Definitions Part A: Implementation of the Project Part B: Financial Provisions Part C: Intellectual Property Rights

19. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°19 2- Annex II - General conditions 2.2.1- Detailed structure  Part A: Implementation of the Project SECTION 1 - IMPLEMENTATION AND DELIVERABLES Article II.2 - ACTIVITIES Article II.3 - PERFORMANCE OBLIGATIONS Article II.4 - FORCE MAJEURE Article II.5 - SUSPENSION AND PROLONGATION OF THE PROJECT Article II.6 - SUBCONTRACTING Article II.7 - REPORTS AND DELIVERABLES Article II.8 - EVALUATION AND APPROVAL OF REPORTS AND DELIVERABLES Article II.9 - CONFIDENTIALITY Article II.10 - COMMUNICATION OF DATA Article II.11 - INFORMATION TO MEMBER STATES AND ASSOCIATED STATES Article II.12 - PUBLICITY Article II.13 - LIABILITY Article II.14 - ASSIGNMENT

20. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°20  Part A: Implementation of the Project SECTION 2 - TERMINATION OF THE CONTRACT AND RESPONSIBILITY Article II.15 - TERMINATION OF THE CONTRACT AND PARTICIPATION OF CONTRACTORS Article II.16 - TERMINATION FOR BREACH OF CONTRACT AND IRREGULARITY Article II.17 - TECHNICAL COLLECTIVE RESPONSIBILITY Article II.18 - FINANCIAL COLLECTIVE RESPONSIBILITY 2- Annex II - General conditions 2.2.2- Detailed structure

21. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°21 2- Annex II - General conditions 2.2.3- Detailed structure  Part B: Financial provisions SECTION 1 - GENERAL FINANCIAL PROVISIONS Article II.19 - ELIGIBLE COSTS OF THE PROJECT Article II.20 - DIRECT COSTS Article II.21 - INDIRECT COSTS Article II.22 - COST REPORTING MODELS Article II.23 - RECEIPTS OF THE PROJECT Article II.24 - COMMUNITY FINANCIAL CONTRIBUTION Article II.25 - REIMBURSEMENT RATES Article II.26 - AUDIT CERTIFICATES Article II.27 - INTEREST YIELDED BY PRE-FINANCING Article II.28 - PAYMENT MODALITIES

22. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°22  Part B: Financial provisions SECTION 2 - CONTROLS, RECOVERIES AND SANCTIONS Article II.29 - CONTROLS AND AUDITS Article II.30 - LIQUIDATED DAMAGES Article II.31 - REIMBURSEMENT TO THE COMMISSION AND RECOVERY ORDERS  Part C: Intellectual Property Rights Article II.32 - OWNERSHIP OF KNOWLEDGE Article II.33 - PROTECTION OF KNOWLEDGE Article II.34 - USE AND DISSEMINATION Article II.35 - ACCESS RIGHTS Article II.36 - INCOMPATIBLE OR RESTRICTIVE COMMITMENTS 2- Annex II - General conditions 2.2.4- Detailed structure

23. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°23 2- Annex II - General conditions 2.3.1- Main issues  The main issues which must be highlighted are: Performance obligations (consortium, contractors, coordinator, Commission) Force majeure Prolongation and suspension of the project (clear provisions for possibility to suspend and prolong project) Termination (simple without fault or breach and with breach) Nullification  and especially...

24. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°24 2- Annex II - General conditions 2.3.2.1- Main issues - Subcontracting  As far as subcontracts are concerned, the model contract of the 6th Framework Programme will mention the following: Contractors shall ensure that the work to be performed, as identified in the technical annex of the contract (Annex I), can be carried out by them. However, where it is necessary to subcontract certain elements of the work to be carried out, this should be clearly identified in the technical annex of the contract (Annex I).  During the implementation of the project, contractors may subcontract other minor services, which do not represent core elements of the project work, which cannot be directly assumed by them and where this proves necessary for the performance of their work under the project.

25. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°25 2- Annex II - General conditions 2.3.2.2- Main issues - Subcontracting Any subcontract, the costs of which are to be claimed as an eligible cost, must be awarded following competitive tender to the subcontractor offering best value for money (best price-quality ratio), under conditions of transparency and equal treatment. The following aspects must be taken into consideration in awarding subcontracts: (a) they may only cover the execution of a limited part of the project; (b) recourse to the award of subcontracts must be justified having regard to the nature of the action and what is necessary for its implementation; (c) the tasks concerned must be set out in the technical annex of the contract (Annex I);

26. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°26 (d) the contractor shall retain sole responsibility for carrying out the action and for compliance with the provisions of the agreement. The contractor must undertake to make the necessary arrangements to ensure that the subcontractor waives all rights in respect of the Commission under the contract; (e) the contractor must undertake to ensure that the conditions applicable to it relating to - Confidentiality; - Communication of data for evaluation, impact assessment, standardisation purposes and communication of information beyond the research community; - Information to be provided to Member States or Associated States; - Publicity; - Payment modalities; - Control and Audit as established in the relevant articles of the contract are also applicable to the subcontractor. 2- Annex II - General conditions 2.3.2.3- Main issues - Subcontracting

27. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°27 2- Annex II - General conditions 2.3.2.4- Main issues - Subcontracting Where the contractors enter into subcontracts to carry out some parts of the tasks related to the project, they remain bound by their obligations to the Commission under the contract

28. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°28 2- Annex II - General conditions 2.3.3- Main issues - Collective Responsibility  Technical Responsibility (applicable to all instruments)  Financial Responsibility - New Used as a last resort Limited in proportion to the participant’s share to the project, up to the total amount they are entitled to receive Exceptions: International Organisations, public bodies or entities guaranteed by MS/AS: solely responsible for their own debts Specific research projects for SME’s [and actions to promote human resources and mobility] and, when duly justified, specific support actions

29. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°29  The cost models are applicable to all instruments in the Sixth Framework Programme where the Community contribution is a Grant for Integration (Networks of Excellence) or a Grant to the Budget (Integrated Projects, Specific Targeted Projects, Specific Research Projects for SMEs, Integrated Infrastructure Initiatives, Coordination Actions, and certain Specific Support Actions).  They do not apply to those instruments where the Community financial contribution is a Lump Sum Grant (certain Specific Support Actions and certain Actions promoting human resources and mobility).  For some Actions promoting human resources and mobility a specialised version of the cost model is applied. Cost Models Applicability 2- Annex II - General conditions 2.3.4.1- Main issues - Cost models

30. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°30 Three cost models are suggested for participants:  Full Cost with actual indirect costs (FC)  Full Cost with indirect Flat rate costs (FCF)  Additional Cost with indirect flat rate costs (AC) Overview 2- Annex II - General conditions 2.3.4.2- Main issues - Cost models

31. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°31  Full Cost with actual indirect costs (FC)  In this model, eligible direct and indirect costs are charged by the contractors.  Full Cost with indirect Flat rate costs (FCF)  In this model, eligible direct costs and a flat rate for indirect costs are charged by the contractors. This flat rate applied is 20% of all eligible direct costs minus the eligible direct costs of sub-contracts.  Additional Cost with indirect flat rate costs (AC)  In this model, eligible direct additional costs and a flat rate for indirect costs are charged by the contractors. The flat rate is equal to 20% of all eligible direct additional costs minus the eligible direct additional costs of sub-contracts. Definitions 2- Annex II - General conditions 2.3.4.3- Main issues - Cost models

32. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°32  Direct costs are all costs that fall under the definition of eligible costs which can be charged directly to the project, and are determined by the contractor in accordance with its usual accounting practices.  Direct additional costs are direct costs additional to the normal recurring costs of the contractor and not covered by any other sources of funding. For direct additional costs of personnel, there are three possibilities to charge these costs to the contract: personnel with a temporary contract for working under the Community contract concerned ; personnel with a temporary contract with a view to completing a doctorate ; personnel whose employment contract depends wholly or in part on additional external financing. In this case, costs charged to the project must exclude all costs covered by normal recurring financing. Definitions 2- Annex II - General conditions 2.3.4.4- Main issues - Cost models

33. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°33  Indirect costs For contractors working on the full cost model (FC), indirect costs are all eligible costs determined by the contractor, in accordance with its usual accounting practices, which are not directly attributable to the project but are incurred in direct relation to the direct costs of the project. For those contractors using either of the flat rate models (FCF, AC) a flat rate is applied to the direct costs to cover the indirect costs. Definitions 2- Annex II - General conditions 2.3.4.5- Main issues - Cost models

34. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°34  Eligible costs incurred for the implementation of the project must fulfil all of the following conditions: they must be actual, economic and necessary for the implementation of the project; and they must be determined in accordance with the usual accounting principles of the contractor and they must be incurred during the duration of the project except for the costs incurred in drawing up the final reports which may be incurred during the period of up to 45 days after the end of the project or the date of termination whichever is earlier; and Definitions 2- Annex II - General conditions 2.3.4.6- Main issues - Cost models

35. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°35  Eligible costs : they must be recorded in the accounts of the contractor that incurred them, no later than at the date of the establishment of the audit certificate. The accounting procedures used in the recording of costs and receipts shall respect the accounting rules of the State in which the contractor is established as well as permit the direct reconciliation between the costs and receipts incurred for the implementation of the project and the overall statement of accounts relating to the overall business activity of the contractor, 2- Annex II - General conditions 2.3.4.7- Main issues - Cost models Definitions

36. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°36  Eligible costs :  In the case of contributions made by third parties established on the basis of an agreement between the contractor and the third party existing prior to the participation of the contractor in the contract, and for which the tasks and their execution by such a third party are clearly identified in the technical Annex (Annex I), the costs must be:  incurred in accordance with the usual accounting principles of such third parties and the principles set out for any contractor;  meet the other provisions of the eligible costs definition and of Annex I.; and  be recorded in the accounts of the third party no later than the date of the establishment of the audit certificate 2- Annex II - General conditions 2.3.4.8- Main issues - Cost models Definitions

37. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°37  Non-Eligible costs :  The following non-eligible costs may not be charged to the project: any identifiable indirect taxes, including VAT or duties; interest owed; provisions for possible future losses or charges; exchange losses costs declared, incurred or reimbursed in respect of another Community project; return on capital debt and debt service charges excessive or reckless expenditure any cost which does not meet the conditions of an eligible cost 2- Annex II - General conditions 2.3.4.9- Main issues - Cost models Definitions

38. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°38 Access to a cost model depends on the type of legal entity concerned:  All legal entities can use the FC model with the exception of physical persons ;  Physical persons are obliged to use the AC model ;  Non-commercial or non-profit organisations established either under public law or private law and international organisations may choose one of the AC, FCF or FC models.  However, only those non-commercial or non-profit organisations which do not have an accounting system that allows the share of their direct and indirect costs relating to the project to be distinguished may opt for the AC model.  Legal entities defined as SMEs have the choice between the FC and FCF model. Access to the Cost Models 2- Annex II - General conditions 2.3.4.10- Main issues - Cost models

39. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°39  Each contractor shall apply the same cost reporting model in all contracts established under the Sixth Framework Programme  As a derogation to this principle: any legal entity which is eligible to opt for the AC model in a first contract can change to the FCF or the FC model in a later contract. If it does so, it must then use the new cost reporting model in subsequent contracts; any legal entity which is eligible to opt for the FCF model in a first contract can change to the FC model in a later contract. If it does so, it must then use the new cost reporting model in subsequent contracts.  AC  FCF  FC  FCF  FC  AC  FC Use of a Cost Model 2- Annex II - General conditions 2.3.4.11- Main issues - Cost models

40. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°40  The maximum reimbursement rates for costs incurred are determined by the type of activity: For contractors using the AC model: 100% of their additional eligible costs whatever those activities might be. For contractors using the FCF or FC model:  for research and technological development activities: 50% of eligible costs;  for demonstration activities: 35% of eligible costs;  for training activities: 100% of eligible costs;  for management of the consortium activities: 100% of eligible costs;  for other specific support activities: 100% of eligible costs; Maximum reimbursement rates per Cost Model General principles 2- Annex II - General conditions 2.3.4.12- Main issues - Cost models

41. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°41  It should be noted that the Community financial contribution of 100% to the management of the consortium activities can not exceed 7% of the total Community financial contribution. This limitation does not apply to each individual participant but for the project as a whole.  One derogation to the definition of eligible costs, relates to the costs incurred for management of the consortium activities by contractors using the AC model. They may charge their eligible direct costs (especially of permanent personnel) to this activity, on condition that they can to identify and justify them precisely. The flat rate for indirect costs also applies to these eligible direct costs. Maximum reimbursement rates per Cost Model Particularities 2- Annex II - General conditions 2.3.4.13- Main issues - Cost models

42. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°42  For Coordination Actions and Specific Support Actions, contractors using the full cost model (FC) may not claim their actual indirect costs. A flat rate for indirect costs is applied in these instruments for all contractors, equal to 20% of the eligible direct costs minus the eligible direct costs of sub-contracts.  Finally, it should be noted that the reimbursement rate claimed represents a possible maximum rate since the receipts of the project must be taken into consideration in determining the total amount of the Commission financial contribution. Maximum reimbursement rates per Cost Model Particularities 2- Annex II - General conditions 2.3.4.14- Main issues - Cost models

43. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°43 2- Annex II - General conditions 2.3.4.15- Main issues - Cost models

44. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°44  Three kinds of receipts must be taken into consideration: Financial transfers or their equivalent to the contractor from third parties ; Contributions in kind from third parties; Income generated by the project.  In the first two cases (financial transfers or contributions in kind), these endowments are considered as receipts of the project if the third party has provided them specifically to be use in the project. If, on the other hand, these endowments are at the discretion of the contractor they are not to be considered as receipts. Receipts of the Project 2- Annex II - General conditions 2.3.4.16- Main issues - Cost models

45. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°45  In the first two cases, where contributions from third parties are used for the project by the contractor, the latter is required to inform the third party of this use and in accordance with the national legislation or practice in force.  In the case of income generated by the project itself: any income generated by the project itself, including the sale of assets bought for the project (limited to the initial cost of purchase) are considered as income to the project (eg : admission fee to a conference carried out by the consortium ; sale of the proceedings of the aforementioned conference ; sale of an equipment bought for the project…) ; by derogation to the above mentioned principle, income generated by the use of the knowledge resulting from the project is not considered as a receipt. Indeed, the use of the knowledge resulting from the project is the main objective of any project supported by an FP6 Community financial contribution. 2- Annex II - General conditions 2.3.4.17- Main issues - Cost models Receipts of the Project

46. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°46 2- Annex II - General conditions 2.3.5- Main issues - Audit certificates  An audit certificate must be provided by an external auditor, or, in the case of public bodies, by a competent public officers must be provided yearly by each contractor in an IP or an NoE must be provided by each contractor at the end of the reporting periods specified in the contract for other instruments supported through a grant to the budget must be provided by any contractor requesting a Community financial contribution exceeding 750.000€, even though an audit certificate is not required for this specific period is linked to one (IP/NoE) or several Forms C (other instruments) of a specific contractor

47. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°47 2- Annex II - General conditions 2.3.6- Main issues - Payments  Periodic advances yearly for IP and NoE (specified in the contract for other instruments) up to 85% (80% for instruments without collective liability)  Community financial contribution depends on: Contractor’s cost model (AC, FC, FCF) Type of activity (research, demonstration, management, training, etc) Submission of audit certificates  Distribution depends on consortium’s decisions

48. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°48 2- Annex II - General conditions 2.3.7- Main issues - Controls & Audits  Controls Periodic activity report (including plan for using and disseminating the knowledge) Periodic management report (including a justification of resources deployed + Forms C + summary financial report consolidating the claimed costs) Periodic report of the distribution between contractors of the Community financial contribution Any supplementary reports required by any Annex of the contract (Annexes I and III)  Audits Scientific, technological, and financial audits New - annual monitoring by Commission with external experts (particularly for IP and NoE) Ethical or other reviews Contractors right to refuse particular expert

49. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°49 2- Annex II - General conditions 2.3.8- Main issues - Sanctions  Financial irregularity is grounds for exclusion from evaluation or selection procedure  Violation of fundamental ethical principles is grounds for exclusion from evaluation or selection procedure  Recovery decisions (article 256 EC Treaty)  Other sanctions in contract (liquidated damages for overclaims)

50. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°50 Pre-existing know-how  Background + Sideground Knowledge  Foreground Use  Commercial exploitation + Utilization in further research activities Dissemination Access rights  Licenses + User rights Key words (definitions) 2- Annex II - General conditions 2.3.9.1- Main issues - IPR

51. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°51 Pre-existing know-how  Always remains the property of the participant concerned Knowledge  Principle: property of the participant who generates it  Exceptions:  Joint property of several participant: where generated by several participants + impossibility to determine the exact contribution of the participants concerned  Always the property of the SMEs for knowledge generated within specific actions for SMEs (Co-operative & Collective RTD projects)  100% EC-funded actions (direct actions, public procurements) Ownership 2- Annex II - General conditions 2.3.9.2- Main issues - IPR

52. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°52 Transfer of ownership of knowledge  The participant concerned shall inform the Commission and the other participants  The participant concerned shall conclude agreement(s) to pass on its obligations (e.g. access rights)  The Commission and other participants may object in exceptional cases:  case of transfer to entities established in non-Member States or non-Associated States  affecting to the rights of the other participants  affecting to the “legitimate interest” of the Community Ownership 2- Annex II - General conditions 2.3.9.3- Main issues - IPR

53. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°53 Requirement  Principle: participant owning knowledge  Exception: the Commission if the owner fails to do so Knowledge concerned  “Knowledge that is capable of industrial and commercial application … having due regard to the legitimate interest on the participants concerned” (flexible requirement) How?  By an adequate and effective protection  In conformity with relevant provisions of the contract (and of the consortium agreement, the case being) Protection of knowledge 2- Annex II - General conditions 2.3.9.4- Main issues - IPR

54. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°54 Requirement By who?  Participants owning (or having access rights to) knowledge  Possibly third parties having access rights How?  By commercial exploitation or utilization in further research activities  If needed, by using pre-existing know-how as well  In accordance with the interest of the participants concerned (flexible requirement)  Terms to be set out by the participants in a detailed and verifiable manner Use of knowledge 2- Annex II - General conditions 2.3.9.5- Main issues - IPR

55. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°55 Knowledge concerned  Any data or information concerning the knowledge  Requirement for dissemination By who?  Publication: the participant owning the knowledge (in Cooperative & Collective research : all participants)  Dissemination: all participants  The Commission where the participant fails to do so How?  Publications: required prior approval of the Commission and the other participants, which may object  Provided that dissemination/publication does not adversely affect the protection or use of the knowledge Dissemination/Publication of knowledge 2- Annex II - General conditions 2.3.9.6- Main issues - IPR

56. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°56 General principles  Granted on written request  No sub-licensing (even for affiliate companies)  unless explicitly agreed  possible optional clause for software, allowing sub-licensing,...  Obligatory access rights between participants are limited to what they really need …  … either for carrying out the project or for using their own knowledge...  … but broader access rights may be freely negotiated  Possible granting of access rights to third parties The Commission may object in exceptional cases (cf. transfer of ownership) Access rights 2- Annex II - General conditions 2.3.9.7- Main issues - IPR

57. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°57 New features  Obligatory access rights are limited to participants of a same project  Clear/simplified financial conditions  royalty-free basis  fair and non-discriminatory conditions to be agreed  Possibility to exclude a specific piece of pre-existing know-how from the obligation to grant access rights  obligatory agreement of all participants concerned  to be agreed before signature of the EC contract  should not concern “core” pre-existing know-how Access rights 2- Annex II - General conditions 2.3.9.8- Main issues - IPR

58. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°58 2- Annex II - General conditions 2.3.9.9- Main issues - IPR Access rights

59. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°59 3- Annex III - Specific provisions  Specific provisions for some instruments Integrated project (IP) Network of excellence (NoE) Integrated infrastructures initiatives (I3) Specific research projects for SMEs (CRAFT/Collective)  Adding complementary provisions to core-contract, Annex I and Annex II  or  Modifying provisions of the core-contract, Annex I and Annex II

60. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°60 4- Annex IV - Form A 4.1- General overview  To be completed by each contractor identified in the core-contract (article 1.2) in order to accede to the contract.  To be signed by each contractor and by the coordinator (One Form A per contractor, except for the coordinator) in three originals: one for the contractor concerned one for the coordinator one for the Commission  One original to be sent by the coordinator to the Commission at the latest [30][45][60] calendar days after the entry into force of the contract.

61. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°61 5- Annex V - Form B General overview  To be completed by each new participant willing to become contractor.  To be signed by each new participant and by the coordinator (One Form B per new contractor) in three originals: one for the contractor concerned one for the coordinator one for the Commission  One original to be sent by the coordinator to the Commission at the latest [30][45][60] calendar days after the entry into force of the adhesion to the contract of the new participant.  Enclosures: Contract preparation form duly completed and signed by the new contractor Modified Annex I (technical annex) to the contract describing the work to be performed by the new contractor Competitive call: documents mentioned in Article III.2 (IP) or III.3 (NoE)  No competitive call: justification for selection and, where necessary, justification for not  having used a competitive call

62. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°62 6- Annex VI - Form C 6.1- General overview  To be completed by each participant for each period specified in the contract.  The structure of a Form C is always the same (content different according to the instrument and type of action concerned) Resources (third party(ies)) Declaration of eligible costs Declaration of receipts Declaration of interest generated by the pre-financing (coordinator only) Request of FP6 financial contribution Audit certificates Conversion rates Contractor’s certificate  To be signed by the person responsible for the work and the duly authorised financial officer of the contractor  To be sent to the Commission by the coordinator in the delays mentioned in the contract  Reminder: a Financial statement per activity (Form C) is not an Audit certificate

63. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°63 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

64. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°64 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

65. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°65 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

66. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°66 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

67. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°67 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

68. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°68 Annex VI - Form C 6.2- Example of an Integrated Project (Draft)

69. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°69 Annex VI - Form C 6.3- 12 different Forms C

70. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°70 7- Conclusion 7.1- Overview of the Annexes (*) of the core - contract per instrument and type of action concerned (Draft) (*) Except Annex I (technical annex - description of the work)

71. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°71 7-Conclusion 7.2- For more information  Information on FP6 model contract are already available on EUROPA web site  http://europa.eu.int/comm/research/fp6/working-groups/model- contract/index_en.html  EC contact points for any question relating to FP6 model contract  DG RTD-A3 - “Regulatory and horizontal aspects”  Head of Unit: Mrs. Megan Margaret RICHARDS  Unit A3 Members:  Milagros BAS SANCHEZ - Francisca BRUNET COMPANY(*) - Ernesto CAMPOGRANDE  Jean-David MALO - Sean O’SULLIVAN(*) - Nicolas SABATIER  For IPR purposes, in addition to the above (*) mentioned people :  Denis DAMBOIS - Magali POINOT  and also Legal and Financial Units of other Research DG

72. DG Research - Directorate A - Unit 03: “Regulatory and horizontal aspects” - Jean-David MALO 17 March 2003 - NOT LEGALY BINDING - Page n°72 THANK YOU FOR YOUR ATTENTION QUESTIONS AND ANSWERS