Part 1 of this series covers proposal submission, and part of the negotiation process.

Part 2 of this series covers the Consortium Agreement and amendments to the Grant Agreement

Financial Management

Throughout the life of the project, from the initial decision to submit a proposal through to project completion, all the decisions you make and the actions you decide upon will be influenced by the financial rules of the Commission.  This includes issues such as pre-financing and how to calculate it, definitions of organisation types, the role and responsibilities of the coordinator in the consortium, certificate on the financial statements, statements on the methodology, and other general financial provisions.  A good initial source of information in this area is the Commission’s “Guide to Financial issues relating to FP7 Indirect Actions” which is available here:

ftp://ftp.cordis.europa.eu/pub/fp7/docs/financialguide_en.pdf

Intellectual Property Rights

Before discussing the importance of having a clear understanding of, and agreement in relation to, IPR a few definitions may be helpful.

Foreground means the results, including information, materials and knowledge, generated in a given project, whether or not they can be protected.

Background is information and knowledge (including inventions, databases, etc.) held by the participants prior to their accession to the EC grant agreement.

These definitions are generalised ones, but they are sufficient for the discussion that follows. IPR issues should be dealt with at the early stages of proposal development. You must establish what background IP each prospective partner is bringing to the table and you must verify that they have the authority to release it to the project for the purposes of carrying out the specified research. You must also ensure that each partner understands and agrees to the method of exploitation of the foreground IP at the end of the project, and have everyone signed off on it.

The commission publishes a guide to IPR entitled “Guide to Intellectual Property Rules for FP7 Projects” and it is available here:

ftp://ftp.cordis.europa.eu/pub/fp7/docs/ipr_en.pdf

This guide should be read in conjunction with the Commission document known as the Rules for Participation, and available here:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2005:0705:FIN:EN:PDF

Project Reporting

Once you have signed the Grant Agreement, you as coordinator will have a contractual obligation to prepare and provide periodic reports as provided for in the Grant Agreement. These reports, and the deliverables associated with them, are evaluated by the Commission to ensure that the project is progressing according to the project plan, and to trigger the release of payments to the consortium.

During the course of the project, you will submit

• The Deliverables set out in your Deliverables List
• A Periodic Report within 60 days of the end of each reporting period, comprising an overview of progress, explanation of use of resources, and a financial statement.

At the end of the project, you must submit a final report comprising a publishable summary report, a report on societal implications of the project, and a plan for the use and dissemination of the foreground IP.

A document providing guidance in this area is ‘Guidance Notes on Project Reporting’ as applied to FP7 Collaborative Projects, Networks of Excellence, Coordination and Support Actions, Research for the benefit of Specific Groups (in particular SMEs), and this is available here:

ftp://ftp.cordis.europa.eu/pub/fp7/docs/project_reporting_en.pdf

Audit Certification

A Certificate on the Financial Statements is compulsory whenever the cumulative amount of interim payments and balance payments to a participant is equal to or more than 375,000 Euros. For each period for which a certificate is required, each beneficiary shall provide a certificate prepared and certified by an external auditor, certifying that the costs incurred during that period meet the conditions required by the agreement. A beneficiary that is a public body, secondary and higher education establishments and research organisations may opt for a competent public officer to provide certification. For participants who opt to provide a Certificate on the Methodology, Certificates on the Financial Statements will not be required.

The Commission provides a set of guidelines in this area entitled “Certificates Issued by External Auditors – Guidance Notes for Beneficiaries and Auditors” and it is available here:

ftp://ftp.cordis.europa.eu/pub/fp7/docs/guidelines-audit-certification_en.pdf

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The Consortium Agreement
Whereas the Grant Agreement is an agreement between the consortium and the Commission, the Consortium Agreement is an agreement between members of the Consortium.
Annex II of the GA states that “save where otherwise provided in the call for proposals, all participants in an indirect action shall conclude an agreement, hereinafter ‘the consortium agreement’”. The Consortium Agreement sets out the details of
• The internal organisation of the consortium
• The distribution of the EC funds provided to the project
• Rules on dissemination, use, and access rights to intellectual property generated in the course of the research
• Mechanisms for the settlements of internal disputes
• Liability, indemnification, and confidentiality arrangements between the participants.

There is a simplified model of the consortium agreement known as DESCA, which provides a excellent starting point for any consortium agreement for collaborative projects. It can be downloaded here:
www.desca-fp7.eu/fileadmin/content/Documents/DESCA__version__2_final.doc

Guidance on the Consortium Agreement
There is potentially a great deal of complexity associated with a consortium agreement, and you should involve the legal departments of your organisations at the appropriate time to finalise the details. You will also need input from your finance department or a Framework proposal consultant. Additionally, if work in the project will create any intellectual property that requires protection, you should seek advice from someone with experience in this area. However, to get you started, the Commission publishes a Checklist for a Consortium Agreement for FP7 projects, and that is available for download here:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/checklist_en.pdf

Amendments to the Grant Agreement
It is quite possible, even likely, that changes will be required to the Grant Agreement over the course of the project. As a general rule, an amendment is necessary whenever the GA has to be modified. According to the Commission – “This is typically the case for any change of the data included in the core part of the GA and for changes of Annex I. Requests for changes to any of the standard annexes (Annex II and III) which were the subject of a Commission Decision cannot be accepted.” Some modifications can be made, in some cases, without modifying the GA, such as budget transfers between activities, or a change in name or legal details under certain limited circumstances.
The Commission provides a guide to assist you with understanding the circumstances in which a GA must be modified, and how to go about effecting those modifications. The document is called “Amendments Guide for FP7 Grant Agreements”, and it is available here:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/amendments-ga_en.pdf

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Participating in the Call for Proposals
In order to get involved at all, you will need to respond to a Call for Proposals issued by the Commission. You can find a list of currently open calls on CORDIS -> FP7 – Find a Call. You can also subscribe to CORDIS and receive automatic updates when new calls are published. Once a call is published, all of the documents required to respond to the call will also be published and made available for download. As an example, a recent FAFB call provided the following documents:
• Call for Proposals
• Guide for Applicants – Collaborative Project
• Guide for Applicants – Coordination and support action (coordinating)
• Guide for Applicants – Coordination and support action (supporting)
• Work Programme – Cooperation Theme 2 FAFB
• Cooperation – Annexes 1 – 5
• Work Programme – Cooperation
• FP7 Fact Sheet

Negotiating your Contract with the Commission
If your proposal has been successful, you will be invited for project negotiation some time after you have been notified of that fact. The purpose of the negotiation phase is to agree on the scientific and/or technical details of the project, to collect any financial and legal information needed for preparing a Grant Agreement, and to facilitate the monitoring of the progress of the project.
The document that governs this is the Negotiation Guidance Notes published by the Commission, and available here:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/negotiation_en.pdf

Negotiating with the Commission
This involves using the Negotiation Facility system, or NEF. To facilitate the negotiation process, the Commission Services provide the interactive online tool NEF (Negotiation Facility). The NEF is only available to projects that have been chosen for funding, and the letter of invitation to negotiations gives details on how to access it.
The tool serves as the main channel for communication and exchange of negotiation
information between the EC Project Officer(s) on the Commission’s side and the coordinator on the applicants’ side. The document that descibes the NEF and your interaction with is is documented in NEF User’s Guide for Coordinators and Participants, which is available here:
http://ec.europa.eu/research/negotiation/nef-ug-co_en.pdf

The Grant Agreement – your contract with the Commission
Once negotiations have successfully concluded, you will then be in a position to sign a grant agreement between the project coordinator and the Commission. This grant agreement is quites short, around five pages in length, but it references several annexes that also form part of the overall agreement:
• Annex I – Description of Work [Joint Programme of Activities (only for Networks of Excellence)]
• Annex II – General conditions
• Annex III – Specific provisions related to this funding scheme or activity (if applicable)
• Annex IV – Form A – Accession of beneficiaries to the grant agreement
• Annex V – Form B – Request for accession of a new beneficiary to the grant agreement
• Annex VI – Form C – Financial statement per funding scheme
• Annex VII –
o Form D – Terms of reference for the certificate on the financial statements
o Form E – Terms of reference for the certificate on the methodology as published in (Reference to English version of OJ)]

The core text of the grant agreement is available here:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/fp7-core-ga_en.pdf

and the General Conditions – Annex II is available at:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/fp7-ga-annex2-v3_en.pdf

Financial and Operational Issues
Before the Commission will sign off on an agreement, they will need to verify a number of things in relation to the participants in the consortium. These fall into three main categories:
1. Verification of existence and legal status.
2. Verification of Operational Capacity
3. Verification of Financial Capacity

Verification of existence and legal status
Different categories of legal entities may have different rights and obligations particularly in relation to EC financial contribution and financial capacity checking. In short, the EU will treat you one way if you are participating as an individual, and another way if you are a large organisation.

Verification of Operational Capacity
The regulations for FP7 provide for the participation in collaborative projects by “any company, university, research centre, organisation or individual, legally established in any country”. This means, in theory at least, that small organisations, and even individuals, can participate in FP7 research. However you will need to satisfy the Commission that you have the capacity, both in terms of facilities and adequately skilled staff, to carry out the research.

Verification of Financial Capacity
For the same reasons as outlined above, the Commission will need to be satisfied that you, in the case of an individual, or your organisation has the financial capacity to carry out your part of the research. For example, in the case of research for the Benefit of SME’s, you will be making a financial contribution towards the research, and may need to show that you can afford it.

The document that covers all this is the rather clumsily entitled “Rules to ensure consistent verification of the existence and legal status of participants, as well as their operational and financial capacities, in indirect actions supported through the form of a grant under the Seventh Framework Programme of the European Community for research, technological development and demonstration activities (2007-2013) and under the Seventh Framework Programme of the European Atomic Energy Community (Euratom) for nuclear research and training activities (2007-2011)” and it is available here:
ftp://ftp.cordis.europa.eu/pub/fp7/docs/rules-verif_en.pdf

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Proposals submitted in response to Calls for Proposals are evaluated by Expert Evaluators. These are drawn from a panel made up of members of the scientific and business communities who have applied to become evaluators by registering on the Commission’s database.

The work programme on which the Call for Proposals is based will specify the evaluation and selection criteria and may add additional requirements such as criteria weighting or score thresholds. It may also set out additional rules or guidelines on the application of the criteria. For example, a recent SME Call contained the following “Please note that for this call, the threshold for the Potential impact criterion will be 4 (instead of 3) and, as a consequence, the overall threshold will be 11 (instead of 10)”.

The Guide for Applicants associated with the Call will specify the evaluation criteria to be used when examining your proposal. The expert evaluators allocate scores to each evaluation criterion, and must only apply the evaluation criteria in the evaluation of proposals. Each criterion is scored out of 5 for FP7 Cooperation, FP7 Capacities, FP7 People, and out of 4 for FP7 Ideas (ERC). Half marks can be given.

Evaluation Scoring table

Evaluation is a two-step process.

1. Individual reading by each evaluator, and the completion of an IAR.
2. A consensus assessment by the evaluators, followed by the completion of a Consensus Report.

Following individual evaluation, each evaluator completes an Individual Assessment Report (IAR). The IAR contains the individual opinions of the expert. On the IAR, the expert must write his comments under each sub-criterion and must score each criterion. The expert’s individual evaluation reports are not subsequently changed.  In signing the individual evaluation report, each expert confirms that he/she has no conflict of interest with respect to the evaluation of that particular proposal.

Because the evaluation criteria are different from one funding scheme (type of project) to another, the IARs are also different, according to the type of project.

When all three experts have evaluated the proposal and submitted their IARs, they meet to discuss their opinions about that proposal. Their common views and comments which result during the consensus meeting is represented by the Consensus Report (CR)

Moderator: The consensus discussion is moderated by a Commission official, and/or the chairs/vice-chairs of the panel. The role of the moderator is to seek to arrive at a consensus between the individual views of experts without any prejudice for or against particular proposals or the organisations involved, and to ensure a confidential, fair and equitable evaluation of each proposal according to the required evaluation criteria.

Rapporteur: During the consensus discussion the 3 experts assign one of them as rapporteur. The rapporteur is responsible for drafting the consensus report (CR), the contents of which must be agreed upon by all of the evaluators. The CR represents a common, agreed opinion of the proposal.

Consensus marks and comments: The experts should agree on a consensus mark for each of the criteria that have been evaluated and suitable comments to justify these marks. Comments should be suitable for feedback to the proposal coordinator. Marks and comments are set out in the consensus report. They also come to a common view on the questions of scope, ethics.

Evaluation Summary Report: The Evaluation Summary Report (ESR) is the report sent to the proposal coordinator after the evaluation. The Evaluation Summary Report (ESR) contains exactly the comments, the marks and the recommended grant given during the consensus meeting (in fact it copies the Consensus Report, minus the names of the evaluators).

When the evaluation is done the Commission sends the feedback to the coordinators of the proposals. The Commission sends the coordinator of each evaluated proposal a letter (“initial information letter”), together with the Evaluation Summary Report (ESR). The aim is to give the applicants a prompt indication of how their proposals fared in the evaluation by experts.

However, at this stage, the Commission cannot make a commitment as regards possible selection for funding (because at this point the proposals are not yet ranked and it is not yet known which proposals can be funded and which proposals will constitute the reserve list).

Later (about 1-2 months later) the coordinator will receive a second letter from the Commission where the coordinator is informed whether his proposal will be funded or not.
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We are often asked for advice in finding and selecting partners for research projects, and have on some of these occasions become involved in the screening and selection process.  While there are many thing to be considered in partner selection, it is probably most important that you ensure that you can have a selection process to begin with. It is far too common to find a consortium requiring five research partners to stop looking for partners once they have the required number on their list. Granted, your field of research may narrow the field for potential collaborators, but in the long run you will do far better if you have options open to you as you begin to fine tune the proposal and require partners to make contributions of time and effort to support the proposal.

So where do you begin your search?

• The first port of call will obviously be your own network of contacts built up during your previous research work. Remember that you will have to work with these partners for several years if your proposal is successful.
• The NCP network in your country should also be able to provide you with contacts in your field, and assist you with partner searches.
• CORDIS provides a partner search facility on the FP7 home page.
• For ICT, there is the Ideal-ist partnering service available at http://www.ideal-ist.net/
• For Environment, there is the Interlink site which publishes partner search and partner profile information at: http://www.interlink-fp6.com/default.asp
• The ManagEnergy partner search page at: http://www.managenergy.net/partners.html
• The BioMatNet partner search page at: http://www.biomatnet.org/secure/Partners/S2139.htm
• The Commissions  FP6 ‘funded projects’ database at: http://cordis.europa.eu/fp6/projects.htm
• The NIS-NEST database (covering Russia, Moldova, Ukraine, Belarus and other Eastern Europe countries)at: http://researchers.nisnest.gr/
• ERA WESTBALKAN database (covering Albania, Bosnia-Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro and Serbia)
• Database of Slovak Research Organizations at: http://doro2.slovakfp6.sk/. At present this web page shows errors when opening. We would appreciate if someone would let us know when it is fixed and we will update this article.
• For Energy related projects, this guide to research in Poland should also be useful: http://www.6pr.pl/pliki/4404/5katalog%20energy.pdf

Selecting Partners

In some cases you will be involved with a consortium where you have worked with all of the partners in previous projects, in which case you will be aware of each others working habits. Any problems that have arisen in  past projects have presumably been ironed out, so you also have an ad-hoc conflict resolution mechanism in place. However, if you have new partners in your consortium with whom you have not worked before, it is important to test their mettle early to ensure that they are fully on board before committing to the final shape of the consortium. We have developed a range of techniques to assess and select partners over the years – here are a few to get you started:

1. Give your candidate parters work to do early in the project. There are plenty of  administrative tasks that they can perform early in the project, and their enthusiasm and efficiency in the early stages can be a good guide to their long term commitment.
2. Use an on-line proposal preparation system such as our own fpBuilder (www.fpbuilder.eu) to easily create and monitor tasks to allocate to them.
3. Assign a delivery date to each task, and monitor their ability to keep to the deadlines. Provide feedback for missed deadlines and use it to monitor their ability to accept constructive criticism.
4. Always court more partners than you need.
5. Ensure that all new partners are aware that there is a selection process.

Applying this level of detail early in the proposal preparation stage may seem a bit like overkill, but it is worth noting that if you select your partners carefully the workload can be evenly distributed, leading to an enjoyable and creative experience. Fail to do this, and you’ll end up doing all the work yourself.

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Call for Proposals: These are published on the CORDIS website and list the calls where the EU are inviting research proposals from various Topics under various Work Programmes.  If a Call addresses more than one Theme it is referred to as either a ‘Joint’ or ‘Coordinated’ calls. It is a ‘joint’ call if it involves two or more  Themes, and a ‘coordinated’ call if it involves two or more Themes and there is a separate budget for each Theme.

CORDIS: CORDIS, the Community Research and Development Information Service for Science, Research and Development, is the official source of information on the seventh framework programme (FP7) calls for proposals. It offers interactive web facilities that link together researchers, policymakers, managers and key players in the field of research.

Challenges: This is a third level of hierarchy within the ICT theme, so the hierarchy is

• FP7 -> Specific Programme -> Theme -> Challenges.

Framework Programme: The overall research framework; currently this is Framework 7, usually referred to as FP7.

Specific Programme: Framework 7 is comprised of  seven specific programmes, which represents the second level in the hierarchy. These are:

• Cooperation
• Ideas
• People
• Capacities
• Euratom
• plus two Specific Programmes for the Joint Research Centre

Theme: This is the second level in the hierarchy of the Cooperation Specific Programme of FP7, containing 10 Themes or ‘thematic priorities’.  These are:

1. Health
2. Food, Agriculture and Fisheries, Biotechnology
3. Information and Communication Technologies
4. Joint Technology Initiative, Nanosciences, Nanotechnology, Materials, and New Production Technologies
5. Energy
6. Environment
7. Transport
8. Socio-economic sciences and Humanities
9. Security
10. Space

Topic: These are contained in Calls for Proposals (see above) and describe specific research questions that the Commission is inviting consortia to submit research proposals for.

Work Programme: The European Commission publishes an annual work programme for each Thematic Area. This document describes the research topics that will be subject to the call for proposals, as well as providing an indicative budget and a timetable for calls for proposals.

NOTE: FP7 nuclear research is guided by the EURATOM-treaty (instead of the Treaty on European Union). FP7 nuclear research receives € 2.7 billion spread over 4 years (2007-2011)

Joint Research Council: The JRC provides independent scientific and technical advice to the European Commission and Member States of the European Union (EU) in support of EU policies.”The mission of the JRC is to provide customer-driven scientific and technical support for the conception, development, implementation and monitoring of EU policies. As a service of the European Commission, the JRC functions as a reference centre of science and technology for the Union. Close to the policy-making process, it serves the common interest of the Member States, while being independent of special interests, whether private or national.

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2. Download Call documentation pack  - Once the call has been published, the Commission makes a detailed information pack available, which includes the relevant Work Programme, details of the call, and a Guide for Applicants. These need to be read and fully understood before you proceed much further.

3. Contact your NCP – Each country has National Contact Points – people who can provide a range of services to assist you with Framework 7, such as Guidance on choosing thematic priorities and instruments, Advice on administrative procedures and contractual issues, Training and assistance on proposal writing’ Distribution of documentation (forms, guidelines, manuals etc.), and Assistance in partner search.

4. Assemble your research consortium – You will need research performers to carry out the research, plus industry participants, and end users to exploit the results. See elsewhere in the fpAdvisor Resource Centre for advice on finding research partners.

5. Develop your research proposal – Using the Guide for Applicants as a starting point, write your research proposal, prepare your budgets, and get agreement from all partners. To avoid delays, and ensure maximum partner involvement,  we recommend that you use our on-line proposal preparation service fpBuilder, which is free, and available here www.fpbuilder.eu

6. Proposal Submission – Your finished proposal must be submitted in electronic for on via the Commission’s EPSS system before the Call deadline. An extension to the deadline is not possible, so you you get set up on the EPSS well ahead of the deadline, fill out all of the background detail required, and get plenty of practice in uploading drafts of your proposal.

7. Evaluation phase – Your proposal will be evaluated and scored by a panel of experts appointed by the Commission, who will also verify that your proposed research complies with the Commission’s ethical standards. If you are successful in your evaluation, your proposal is then eligible for funding, subject to budget availability.

7. Negotiations and Agreements – At this stage you will be required to negotiate and sign two main documents: The Consortium Agreement which is between the members of the consortium, and the Grant Agreement which is between the consortium and the Commission.

8. That’s it! – You are now ready to begin your research.

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So, what is an SME?  There are four main criteria:

1. The organisation is an enterprise engaged in economic activity.
2. It has fewer then 250 employees.
3. An annual turnover less than €50 million, or a balance sheet total less than €43 million.
4. It is autonomous.

That’s the broad definition, and more detailed information is available from EU publications. (2)

If you are unsure whether or not you qualify as an SME, you can take an online test at http://flt.uwe.be

Which sort of SME are you?

There are two categories of SMEs when talking about Framework research

• Research Performing SMEs, who who have the ability to conduct research in-house.
• Research Acquiring SMEs, who need to outsource their research to a university or research centre, who will perform the research on their behalf.

What will be funded?

The Commission divides this into three groups:

1. Supporting SMEs outsourcing research activities
2. Developing and coordinating support to SMEs at national level
3. Support measures

The first category is the one of most direct interest to SMEs and is further sub-divided into

• Research for SMEs
• Research for SME Associations

In Research for SMEs, the SME participants are the direct beneficiaries of the project: they invest in the RTD project and outsource (subcontract) most of the research and demonstration activities to RTD performers and receive in return the technological know-how they need to develop new or improve existing products, systems, processes or services.

In Research for SME Associations,  The SME associations and their members are the direct beneficiaries of the project: they invest in the RTD project and outsource (subcontract) most of the research and demonstration activities to RTD performers and receive in return the technological know-how they need.

References

1. European Commission Framework 7 FAQs
2. European Commission – “The New SME Definition”. This was published for Framework 6, but is still relevant for Framework 7.
3. Research for SMEs at a glance
4. Research for SME Associations at a glance.

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