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Frequently Asked Questions on
Criteria, Contracts, Costs & Consequences

Elegibility and Evaluation Criteria

Contracts for INCO& ESPRIT Projects

Allowable Costs & Special Conditions

Cost Statements, Reporting & Payments

Consequences & Possible Risks

Eligibility and Evaluation Criteria

Are the eligibility criteria of ESPRIT and INCO the same?

The eligibility criteria (the "rules of participation") for ESPRIT and INCO are to a very large extent identical. For ESPRIT non-EU/EEA participation is merely additional to the minimal EU/EEA consortium composition, whereas for INCO proposals this is a compulsory element.

It is very important to check this before writing a proposal. If these basic criteria are not fulfilled the proposal will (and can!) not be considered, whatever its technical merits might be. The text of the call for proposals and the information package for the call will normally answer your doubts.

Can non-EU/EEA organisations participate in all ESPRIT activities?

Nearly all IT action types are open to non-EU/EEA participation, on condition that at least the minimal number of required EU/EEA participants are involved in the proposal (see also the "Guide to non-EU participation in ESPRIT"). In case of doubt, you should ask a project officer or someone from the international cooperation team.

Normally non-EU/EEA organisations are expected to cover their own costs within the ESPRIT proposal and only minimal contractual conditions are imposed. Additionally organisations from Countries of Central Europe and the Baltic States (CCE) or from the Newly Independent States of the ex-USSR (NIS) or from Developing Countries (DC) could benefit from an EC contribution from the INCO RTD Programme.

Are the evaluation criteria of ESPRIT and INCO the same?

The criteria for evaluation of RTD proposals are slightly different according to the Specific Programme concerned. Although both the ESPRIT and the INCO programme have academic / technical quality as their prime selection criterion, some programme-specific criteria are applied.

For ESPRIT the compliance with the IT Work Programme will be of primordial importance, with the EU's industrial competitiveness in a key role. For the INCO programme the focus lies also on the CCE/NIS/DC participant's needs, on the internationally added value and on the stabilising effect on the local research staff (esp. for CCE/NIS).

INCO & ESPRIT Contracts

Do non-EU/EEA organisations receive special contracts?

Once a project has been selected for funding under an ESPRIT or an INCO call for proposals the same standard FP4 contracts will be applied. For CCE/NIS/DC participants who will receive EU funding a number of special financial conditions are applied, which are usually described in a separate Annex, which is equally valid.

The most common contract types are:

The technical details of the RTD Project are specified in the Project Programme, which is an integral part of the contract (Annex I). The forms for completing the Project Programme are identical for ESPRIT & INCO Projects. Also the staff and the tools for processing these contracts are the same.

Allowable Costs & Special Conditions

What are the allowable costs?

When submitting a proposal or negotiating/signing a contract it is important to realise that the Commission is making a contribution towards the real costs you incur while carrying out RTD activities; you will need to report and justify these costs before any payments are made. The EC's financial contribution is under no means to be considered as a grant or a payment for the purchase of a product.

During the contract negotiations the indicative amounts of the allowable costs will have been agreed upon by all participants and specified in the "Project Programme" (Annex I of the Contract). The most important cost categories are: personnel, equipment, services, consumables, computing costs and overheads). There still migth be a number of other acceptable costs, depending on the action type.

Do non-EU/EEA organisations participate under the same financial conditions?

A number of special conditions are applied to CCE/NIS/DC participants, which will normally be implemented by means of an "Annex III" to the RTD cost reimbursement contract. In some cases, these conditions will be inserted directly into the contract's relevant "special conditions article". More detailed information on these special conditions is available .

These "special" conditions are introduced because they deal with a number of problems which are typical for the countries concerned; they are by no means intended to discourage the participation by CCE/NIS/DC participants. The basic problems tackled by the special conditions are:

Cost Statements, Reporting & Payments

How will the Commission monitor the scientific progress?

In order to assess the scientific/technical progress of the Project the Coordinator should report regularly to the Commission by means of a Periodic Progress Report (PPR), which reports on the RTD activities, progress, meetings, results & deliverables, prospects & planning.

In addition it is current practice that the Commission (or an independent expert) attends personally at least one of the Project's meetings for a review of the Project. Usually this will be somewhere in the middle of a Project's life-time, when the first results have been obtained and when sufficient time is left for changing strategies if necessary.

How will the Commission make the payments to the Consortium?

Shortly after the signature of the contract an advance payment is made to provide the consortium with sufficient funds to start the Project. For CCE/NIS/DC participants the advance will usually be 50% of the maximum amount agreed upon in the Project Programme.

Each participant should regularly justify his own costs on a "Cost Statement" providing some (limited) detail on these allowable costs. These Cost Statements will be submitted to the Commission through the Coordinator, who acts on behalf of all Contractors. Strict observance of the terms by all (associated) contractors is necessary to avoid delays for any of the other contractors.

Any further intermediate payments are made according to the cost submitted in the cost statements (which will usually coincide with the PPRs). The claimed costs which are (provisionally) accepted will be reimbursed up to 90% of the maximum amount. The remaining 10% is called the "retention".

The acceptance of all costs which are claimed (and possibly also reimbursed) is considered to be provisional until they are approved at the end of a project. For that purpose a final "Consolidated Cost Statement"" (CCS) is agreed upon between the Coordinator and the Commission, taking into account the costs and the results of the project. Only after approval of the CCS will the retention be released and will the final payment be made, if necessary.

Consequences & Possible Risks

Which contractual conditions will apply?

Especially if you are participating for the first time in an EU-funded RTD Project you should READ the contract, its annexes and its (special) conditions, as you (on behalf of your organisation) are legally bound by it. You should strictly observe the forms and deadlines specified in the contract and Project Programme.

It is important to make clear arrangements in advance, not only on the scientific & technical issues, but also on the administrative obligations, as well as on the intellectual property & exploitation rights within the consortium. You should bear in mind the contract with the Commission is not only binding towards the Commission, but also internally among the consortium's partners.

What timing can I expect for my RTD activities?

As the evaluation of the proposal and the negotiation of the contract will take several months, some time will inevitably elapse between the conception of your proposal and the signature of the contract. During the negotiations you can indicate your preferred starting date, but costs for work carried out before the commencement date of the project cannot be reimbursed.

Towards the end of the Project you will have to cover for 10% of your own funding if you want to claim the full amount of costs specified in the Project Programme (see above under "retention"). You should take the appropriate steps to ensure full continuity up to the 100% completion of the Project, even if you won't have the money yet.

Which anti-fraud measures are taken by the Commission?

In advance of offering/signing the contract, the Commission will check the financial viability of the Consortium, esp. of the Coordinator who receives all payments and who should forward these to his partners. If the Commission has any indication that there is reason for suspicion (e.g. insufficient cash-flow, danger of bankrupcy) appropriate measures will be taken and the contract might not be concluded or the particular partner will not be allowed to participate.

All costs which are claimed for reimbursement (on the cost statements) should be justifiable and each partner should provide (written) proof of the expenditure if requested. Hence it is wise/safe to keep copies of all expenditure which is made/claimed for the project, either centrally (by the Project Coordinator) or locally (by the partners themselves).

Even when the CCS has been approved and a final payment has been made the Commission or the Court of Auditors have the right (up to two years after the expiry date of the contract!) to audit the accounts of any of the Contractors and -if necessary, e.g. in case of fraud- to proceed to recovery of any money previously paid.

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It was last updated on 15 July 1997 and is maintained by (E-mail removed)

International RTDCooperation in IT
FAQs on Criteria Contracts, Costs & Consequences

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