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Frequently Asked Questions (FAQ) - Contracting/Subcontracting

Question details: 
Distinction between a subcontractor and the purchase of goods and Services: is the crucial point whether or not there is a named/numbered task recorded as part of one of the work packages in the DoW. So is it correct, that depending on the way the text is written, the end result might be a subcontract, or might be a contract for goods/services.
Answer: 

The answer can be found in the Annotated Model Grant Agreement (MGA) under Article 10 (Subcontracting, page 128) and Article 13 (Contracts to purchase goods, works or services, page 119). There is also a table comparing those two options (Article 8 pp 113).
http://ec.europa.eu/research/participants/data/ref/h2020/grants_manual/a...

Question details: 
What do you consider a department of an institution that issues invoices for the services provided to the other departments of the institute due to the accounting system of the organisation? Is it a third party?
Answer: 

Since the price is charged by a different department of the same legal entity, this is considered internal invoicing.

Question details: 
For the clinical trial in a project the participating centres have been identified as subcontractors to include patients and it is foreseen that an agreement is signed between the sponsor and the participating centre. Is it an obligation to set up a binding procedure to choose the participating centres?
Answer: 

The beneficiaries must base their subcontracts on the ‘best value for money’ or on the lowest price. The best value for money principle does not require competitive selection procedures in all cases. However, if a beneficiary did not request several offers, it must demonstrate how best value for money was ensured.

Answer: 

No, contracting between beneficiaries is not allowed. Each beneficiary must declare its own costs.

Question details: 
In the AMGA it states that in exceptional cases subcontracts are possible between beneficiaries and affiliates. Does this also apply to linked third parties (no affiliate, but legal link)? Does this rule also apply to contracts?
Answer: 

The Grant Agreement does not exclude the possibility that a contract or subcontract is awarded to a third party with a legal link to a beneficiary (which is not an affiliate). However, the selection of the (sub-)contractor must not be influenced by a conflict of interest. See the examples in article 35 of the Annotated Grant Agreement for further information.

Answer: 

The rule is that the tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1, and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The actual price may be higher or lower than the estimation in the budget. There is no ‘% tolerance’ foreseen.

Question details: 
Difference Subcontracts / Contracts to purchase goods: When you need to buy a special machine, specially designed for the project, to carry out the work programme, what kind of third party is the supplier? Contractor? Subcontractor? Is the cost of the machine an eligible cost (the full cost or only the depreciation costs of the machine during the project)?
Answer: 

We are afraid it is impossible to answer your question regarding contracts/subcontracts in general without knowing further details.
Regarding durable equipment such as machines, only the share of the depreciation costs used for the action (taking into account the equipment’s ‘full capacity’) is eligible.

Question details: 
Is subcontracting possible with the affiliates if they are a 3rd party in the contract through Art 14? The question is if a linked third party is also the usual provider for the use of equipment (but not the same general direction) is it possible to consider them as contractor. Hence, they will make an invoice to the R&D department of the Beneficiary.
Answer: 

By definition, a Linked Third Party does not charge a price, but declares its own costs in line with the eligibility conditions of the Grant Agreement. Therefore, a Linked Third Party cannot be a subcontractor of a beneficiary in the same project.

Answer: 

We are not sure if we understand your question correctly.
As a general rule, service contracts do not cover the implementation of an action task (as defined in Annex 1), but are necessary for the implementation of a task by beneficiaries themselves. As long as the analytical work performed does not cover the implementation of action tasks, it is considered a service and not a subcontract.

Answer: 

According to the Annotated Model Grant Agreement, ‘framework contract must (have) be(en) awarded on the basis of best-value-for-money and absence of conflict of interest.’ Moreover, general eligibility conditions such as compliance with the principles of sound financial management, apply. There is no rule that explicitly requires a re-evaluation of the framework contract after several years.

Question details: 
How can you distinct between subcontracts and cost for services as service contracts in research projects: are pure measures of scientific samples belonging to services (if not including scientific work) and in contrast is a R&D contract including research belonging to subcontract? How can you then proceed in a marginal case like blood measurements with a resulting standard analysis which later on will be scientifically evaluated and incorporated into the work action?
Answer: 

To a large extend, the distinction between contracts and subcontracts is project-specific. If the work to be outsourced is defined as an action task in Annex 1 of the Grant Agreement, the related contract is considered a subcontract. In contrast, a contract does not cover the implementation of an action task, but is necessary for the implementation of a task by beneficiaries themselves.