Overview of contractsOverview of contracts

Ingrid Mariën-DusakIngrid Mariën-Dusak

Information Day for CoordinatorsInformation Day for Coordinators

17 July 200317 July 2003

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OverviewOverview

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

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EC

TREATY

FRAMEWORK PROGRAMME

SPECIFIC PROGRAMMES

PARTICIPATION AND DISSEMINATION RULES

CONTRACTSOther relevant EC Regulations

FINANCIAL REGULATION

INTERNATIONAL AGREEMENTS

WORK PROGRAMMES &

Calls for proposals

GUIDELINES ON EVALUATION AND

SELECTION PROCEDURES

Legal FrameworkLegal Framework

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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

General principlesGeneral principles

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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)

Contract structureContract structure

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Annex IIAnnex 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

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Contract structure & instrumentsContract structure & instruments

Core contract Annex II Annex III

IP Yes

NoE Yes

STReP

CA Common Common None

SSA

SME Yes

I3 Yes

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Annex IV - Form A

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

Contract structureContract structure

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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

ContractorsContractors

NeNe

ww

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A contractor among other contractors

No additional rights

BUT

Additional obligations

Administrative tasks: single entry point for

communication, payments, reporting etc.

Co-ordinatorCo-ordinator

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Conclusion of the contract Conclusion of the contract 1/21/2

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.

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Conclusion of the contract Conclusion of the contract 2/22/2

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.

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Evolution of the Consortium Evolution of the Consortium 1/21/2

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.

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Evolution of the Consortium Evolution of the Consortium 2/22/2

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.

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Entry into force and durationEntry 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

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Reporting Reporting 1/21/2

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

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Reporting Reporting 2/22/2

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

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Submission and approval of reportsSubmission 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

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AmendmentsAmendments

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

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General conditions of the contractGeneral 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, ...

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Collective Responsibility of ContractorsCollective 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

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Controls and AuditsControls and Audits

Controls

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

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SanctionsSanctions

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

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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

The Consortium Agreement The Consortium Agreement 1/31/3

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The Consortium Agreement The Consortium Agreement 2/32/3

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

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The Consortium Agreement The Consortium Agreement 3/33/3

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

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Intellectual Property Rights (IPR) Intellectual Property Rights (IPR) 1/31/3

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)

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Intellectual Property Rights (IPR) Intellectual Property Rights (IPR) 2/32/3

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

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Intellectual Property Rights (IPR) Intellectual Property Rights (IPR) 3/33/3

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

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FP6 System of Access RightsFP6 System of Access Rights

Access rights topre-existing know-how

Access rights toknowledge

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

Royalty-free

If a contractor needs them for using its own knowledgeFor use

(exploitation + further research)

Non-discriminatory conditions to be agreed

Royalty-free 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)

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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 *

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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

Article 9 Special clauses

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Annex III - Integrated projectsAnnex 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

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Annex III - Networks of excellenceAnnex III - Networks of excellence

Community financial contribution

Competitive calls

Updating the joint programme of activities

Annual review

Failure of annual review