| STRUCTURE |
| Contract (body) |
Contains basic provisions (scope, duration, costs and financial contribution, project’s deliverables,..)
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| Annex I |
Contains the scientific and technical description of the project and the distribution of the work between the participants
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| Annex II |
Contains general provisions (implementation of the project, intellectual property rights, reimbursement of costs, auditing) including various models of financial statements
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| Annex III |
Contains special conditions (definition) where applicable 
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| EXECUTION OF THE PROJECT |
When does the project start?
* Principle:
The first day of the month after the last signature of the contracting parties
* Exception:
At a fixed date
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What are the participant's main obligations?
* Principal contractors:
- to carry out the project in accordance with the technical annex
- to use reasonable endeavours to achieve the results aimed at by the project (subject to cases of force majeure)
- to provide adequate and effective protection for their knowledge which is capable of use
- to use or cause to be used their knowledge
* Assistant contractors:
- to carry out their work in the project in accordance with the technical annex
- to use reasonable endeavours to carry out their work
- to provide adequate and effective protection for their knowledge which is capable of use
- to use or cause to be used their knowledge
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What about subcontracting?
Only to provide services, supplies or goods for the specific needs of the project provided that Annex I contains sufficiently detailed data or the Commission’s prior written approval is given.
Subcontracts may only be concluded for minor parts of the work
Coordination tasks may be subcontracted, and but coordination costs are not eligible as direct costs.
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What are the participant's main liabilities?
* Principal contractors:
- are jointly and severally liable for carrying out the project vis-à-vis the Community
- shall assume the technical and scientific supervision of their assistant contractor(s)’ part of the project
* Assistant contractors:
- are liable for carrying out the part of the project specifically assigned to them
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What sort of deliverables must participants submit?
* Scientific deliverables:
- periodic, final and supplementary reports
- technological implementation plan
* Financial deliverables:
- cost statements
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INCO SPECIFICITY:
*Financial deliverables for contractors from Mediterranean countries, new independent States, non-associated Central and Eastern European countries and developing countries:
- Cost statements: the Euro conversion and exchange rates for cost statements and related payments shall be the rates published by the official national organisation in charge of setting the exchange rates in the country in which the contractor is established and in force on the day of recording the invoice or any other document supporting the cost item in the contractor's accounts. |
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What sort of controls?
* Financial audit: To ensure that the financial rules have been complied with
* Technological audit: To ensure that contractors are complying with the intentions stated in the Technological Implementation Plan
* Technical verification of the project: To verify that the project has been carried out in accordance with the conditions indicated by the contractors
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| COORDINATION OF THE PROJECT |
Who may be coordinator?
Only one of the principal contractors
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What does coordination encompass?
Scientific, financial and administrative coordination of the project (scientific coordination on the one hand and financial and administrative coordination on the other may be split)
Coordinator acts as intermediary between the contractors and the Commission.
Among his obligations are:
- to submit to the Commission cost statements, periodic, final and supplementary reports, the summary of the technological implementation plan, ..
- as representative of the contractors, to receive payments from the Commission and to transfer them to the contractors
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| FINANCIAL RULES |
What is the rate of FP5 participation?
* Principle:
- 50% of the total eligible costs
* Special case:
- 100% of the additional eligible costs
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What is the applicable cost reimbursement system?
* Total eligible costs:
- Full Cost model
- Full Cost Flat-Rate model
* Additional eligible costs
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Which costs are eligible?
* Direct costs:
personnel, durable equipment, consumables, travel and subsistence, computing, subcontracting, protection of knowledge, other specific costs, administrative and financial coordination
* Indirect costs (overheads):
administration and management costs, depreciation of building and equipment, water, electricity, telecommunications and postal charges, office supplies, administrative personnel costs not charged as administrative and financial coordination costs
| INCO SPECIFICITY For contractors from Mediterranean countries, new independent States, non-associated Central and Eastern European countries and developing countries:
Direct costs:
Durable equipment: Purchases of durable equipment by or for the same contractors may be charged without taking account of the depreciation period, provided the equipment remains on their premises throughout the duration of the project and after completion of the project.
For contractors from non-associated Central and Eastern European countries and new independent States using the additional costs system:
Direct costs:
Personnel costs: permanent staff may be charged to the contract.
Indirect costs: A flat-rate amount of 10% of the direct costs may be charged where the personnel costs for permanent staff are charged to the contract. |
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How is the Community's financial contribution paid?
To the coordinator in several instalments:
- Initial advance: should not exceed 40% of the Community’s financial contribution
- Periodic payments: calculated on the basis of the eligible costs upon the Commission’s approval of the periodic reports and the corresponding cost statements
- Final payment: retention rate of 15% of the Community’s financial contribution until the Commission has approved the last project deliverables
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| INTELLECTUAL PROPERTY RIGHTS |
What kind of intellectual property rights?
* Pre-existing know-how:
- always remain the property of the participant who has generated it
* Knowledge:
- property of the participant who has generated that knowledge
- in case where knowledge is generated by several participants, an agreement shall be made relating to the ownership and the use of that knowledge.
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Which access rights are granted to participants of same projects?
* For carrying out the project:
- under favourable conditions for principal contractors to the pre-existing know-how necessary to carry out their work in the project
- under favourable conditions for assistant contractors to the pre-existing know-how of their principal contractor(s) or of other assistant contractor(s) of their principal contractor(s) necessary to carry out their work in the project
- under market conditions for assistant contractors to the pre-existing know-how of other principal contractors/other assistant contractors
- on a royalty-free basis for principal contractors to knowledge necessary to carry out their work in the project
- royalty-free for assistant contractors to knowledge of their principal contractor(s) or of other assistant contractor(s) of their principal contractor(s)
- under favourable conditions for assistant contractors to knowledge of other principal contractors/other assistant contractors
* For use:
- under favourable conditions for principal contractors to the pre-existing know-how necessary to use their knowledge
- on a royalty-free basis for principal contractors to all knowledge of the project
- under favourable conditions for assistant contractors to knowledge of their principal contractor(s) or of other assistant contractor(s) of their principal contractor(s), necessary to use their knowledge
- under market conditions for assistant contractors to knowledge of other principal contractors/other assistant contractors necessary to use their knowledge
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For how long will participants of a same projects be entitled to access rights?
* For carrying out the project:
- during the project
* For use:
- during five years after the end of the project
- a longer time can be agreed between the participants and shall be reported in the technological implementation plan
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Which access rights are granted to participants of another project under the same specific programme?
* For carrying out of the project:
- for principal contractors subject to legitimate interests of the contractor concerned under favourable conditions to knowledge
* For use:
- for principal contractors subject to legitimate interests of the contractor concerned under market conditions to knowledge needed to use the knowledge that they have generated
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What about the technological implementation plan?
Composed of four parts
Part 1: Overview and description of the project and its results
Part 2: Description of the intention for the dissemination and use/exploitation by each participant
Part 3: Description of the needs of each participant in further collaboration in view of dissemination and use of its results
Part 4: Assessment of the European interests
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| OTHER GENERAL PROVISIONS |
Who may sign?
The legal/statutory/authorized representative of each contracting party
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When does the contract enter into force?
The day of the signature of the contract by all contracting parties
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May the contract be amended?
Under exceptional circumstances, on request duly justified and received at least two months before the expiry of the duration of the project and on common agreement.
And only in writing by way of an amendment duly signed by the authorized representatives of the contracting parties
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What is the applicable law?
The law of competent authorizing officer (Belgium or Luxembourg)
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Which court is competent to hear any disputes between the Community and the contractors as regards the validity, the application or any interpretation of the contract?
* Principle:
Court of First Instance of the European Communities
* In case of an appeal:
Court of Justice of the European Communities
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