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The Finance Helpdesk is happy to announce our first Workshop on Marie Curie issues.

Please note that The Finance Helpdesk will be holding a one day Financial Workshop in Tel-Aviv, Israel, on 12 March.

These guidance notes target FP7 Collaborative Projects, Networks of Excellence, Coordination and Support Actions, Research for the benefit of Specific Groups (in particular SMEs) and are aimed at assisting participants who are invited for project negotiation following the evaluation of their proposal. It outlines the information and procedures in the negotiation process.

The Commission have published Draft Guidance Notes (Version 14.01.2008) for preparing the Grant Agreement for ERC Frontier Research Scheme (Starting Grants) under the IDEAS Program

This guidance is provided for information purposes and easing cooperation. The notes do not replace legal sources but aim at assisting participants who are invited for preparation of the Grant Agreement following the evaluation of their proposal. It outlines the information and procedures in the granting process.

In FP7 R&D projects the default position is that project beneficiaries are not allowed to make a profit from the costs they charge to a project.

In a "Research for the Benefit of SMEs" project, the RTD performer(s) can include an element of profit in the amounts they invoice SMEs for RTD and Demonstration activities.

We quote from the Work programme 2008-Capacities-Research for the benefit of SMEs:

"The relationship between SMEs or SME associations and RTD-performers under this Programme is a "customer-seller" relationship. To further develop their activities, SMEs or SME associations buy knowledge from RTD performers, who sell their expertise and work.

Specific research and development activities undertaken by SMEs or SME associations with their own resources are essentially focused on initial specifications and on the validation and testing of the acquired knowledge.

In this context, the real investment or cost incurred by SMEs or SME associations includes a price they pay for the know-how they wish to acquire: i.e. the intellectual property rights and knowledge developed during the project.

The Finance Helpdesk will be holding a workshop specifically on these issues on 13 March in Brussels.

In the past, a tool called the GPF editor was used to prepare the GPFs. Now, the Grant Agreement Preparation Forms have to be completed in an on-line IT tool called NEF (Negotiation Facility). The paper versions of GPFs which are found in Appendix 9 of the latest FP7 Negotiation Guidance Notes (including a full set of explanatory notes) are just for information. The actual layout in the IT tool unfortunately will be different.

The forms in the Negotiation Facility (NEF) are an extension of the proposal submission forms. They will be pre-filled with the available information from the proposal. The coordinator should update and complete the information for all applicants (including those not requesting any funding).

Certain details, principally from forms A1 and A2, are used to generate a Project Fact Sheet, which is widely disseminated by the Commission. The budget forms and the project summary form are included as part of Annex I to GA. In addition, the GPFs may also be used as a reference base by the Commission when receiving financial statements during the lifetime of the project.

Although the GPFs are not part of the Grant Agreement (except for the budget forms and the project summary form), it is important that the information in the forms is exact.

Please Note: Currently for grant agreement negotiations in the area of information communication technologies (ICT), the offline system, GPF editor, is still in use. The new online negotiation tool NEF will be introduced gradually also for the ICT grants in the coming months.

In FP7, the Commission introduced the concept of a central database called URF (Unique Registration Facility). The facility is being introduced in several stages, so that changes to the validation procedure are necessary during 2008.

In early 2007, a central validation team in the Commission's Research Directorate-General started operating. Each time a provisional ranked list for a call for proposals becomes available, the central validation team matches the participants in proposals likely to be selected/get funded against the legal entities already validated. The central team contacts entities which have not yet been validated, asks them for data and supporting documents and starts the validation process, so that at the start of negotiations the majority of participants are already validated (or at least in the process of being validated).

Once an organisation has been validated, then they receive a PIC (Participant Identification Code). As of January 2008 several thousand entities have been "FP7 validated". Some of these organisations have found themselves to have been issued with more than one PIC. If this is the case with you, then please contact the Commission and explain the situation and they will merge your entries in the URF.

For organisations that are already validated at the beginning of the grant agreement preparation phase, the start version of the Grant Agreement Preparation Forms (GPFs) in the online NEF tool (see above), will display the validated data (read-only) and the validation status. In the interim phase between now and spring 2008, entities are informed about their validation status only via NEF.

Starting early in 2008, each legal entity will be asked by the Commission to appoint one person A Legal Entity Appointed Representative (LEAR) for being the correspondent towards the Commission on all issues related to the legal status of the entity.

This request will be by letter to the central administration, with a copy to persons of the legal entity already identified in proposals and grant agreements.

The LEAR provides the Commission with up-to-date legal and financial data (including supporting documents, where necessary) and commits to maintain the account so that it is upto- date enabling future use for grants and other transactions between the entity and the Commission.

The LEAR communicates his role internally in his organisation and provides the PIC to other employees dealing with proposals and grant agreements. The system will allow the LEAR to delegate tasks to collaborators in his organisation.

The LEAR (or the authorised person having appointed the LEAR) informs the Commission when the LEAR role is due to be transferred to another person and provides the Commission with the name and contact details of the new LEAR; Changes in the coordinates of the LEAR should be communicated in a timely manner.

The Unique Registration Facility (URF) will be the first module of a future Participant Portal that will gradually be developed in the coming years as the central means of communication between participants and the Commission for the full grant management lifecycle. The participant portal will be a secure Internet site that ensures adequate authentication and confidentiality mechanisms.

In the second semester 2008, the portal will be opened for online access by the LEARs (with login and password) to be able to view the information stored in the account of their legal entity and to introduce change requests and upload documents.

In the second semester of 2008, when the URF is integrated into the participant portal, legal status validation will be completely separated from negotiation of individual grants. For new entities participating in a proposal for the first time, the proposal submission will trigger the process of identification of the LEAR, validation of the entity and assignment of the PIC.

Legal entities starting negotiation without being validated will need to introduce a separate request for appointment of their LEAR and obtain validation via the URF (online, via the portal) before an agreement can be signed.

This can be seen as falling under two distinct categories; the operating costs of the JU and the funding available for R&D. Below we quote the Artemisia published figures which will remain the same for the whole of FP7 and can be taken as a good example for all 4 current JUs.

The Joint Undertaking itself will be funded by a combination of annual contributions from the members complemented by a levy on all partners in JU funded projects. Artemisia will levy a charge of 1.5% from each project participant. However if there are non-members in a project who do not pay this contribution, then the large company members will have to pick up their contribution costs. Each JU will define its own membership costs. Again taking Artemisia as an example their annual membership costs have been initially defined as follows:

The typical operating costs of the Artemisia JU are agreed to be up to 20 €M or 1% of R&D costs, not exceeding 30 €M with the Commission contribution not exceeding 10 €M.

In the case of Artemisia, the total available R&D budget will e made up of the following elements:

R&D participants > 50% of their costs in kind i.e. R&D costs) – compared to ~65% in Eureka

There are two basic situations for partners belonging to a FP7 Member State of Associated country: their country is a Member state of the particular JU or not. Please note that there are two types of “member state”.

For JU member state participants, they will receive up to 50% funding of their R&D with approximately 1/6th from the JU and an additional 1/3rd from their own national funding direct.

For participants from a country that is not a member of the JU (but are a FP7 member state or Associated Country) then they will only receive the 1/6th funding from the JU. Note that they could, in theory, then receive an additional 1/3rd from their own country without them being a member of the JU. In this case that country would not be able to participate in the JU management or supervision activities. This situation is similar to a “project by project” type of participation.

Note that one implication of the R&D funding rules implies that if a particular JU member state has insufficient participation from that country, then the overall funding available to the JU will be reduced.

Another important rule is that in any consortium bidding on a JTI call, there must be a minimum of three unaffiliated partners from three different JU Member States.

SMEs and Research/Academic partners should also note that whereas under FP7 they could get up to 75% funding, under JTI funding everyone appears limited to up to 50% funding. The rules and terms for the National Contributions will also vary widely between different member states.

Finance Helpdesk Newsletter #16