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1 Practical Aspects of Negotiations Negotiation Kick-off meeting / 7 th Call CSJU Brussels, 24-02-2011 Andrzej Podsadowski GRA-ITD PO.

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Presentation on theme: "1 Practical Aspects of Negotiations Negotiation Kick-off meeting / 7 th Call CSJU Brussels, 24-02-2011 Andrzej Podsadowski GRA-ITD PO."— Presentation transcript:

1 1 Practical Aspects of Negotiations Negotiation Kick-off meeting / 7 th Call CSJU Brussels, Andrzej Podsadowski GRA-ITD PO

2 2 Introduction Negotiations step by step:  1.1 Big Picture  1.2 Opening Negotiations  1.3 Financial/Legal Negotiations  1.4 Technical Negotiations  1.5 Hints from Project Implementation  1.6 Special case – not validated PIC  1.7 Examples of payments  1.8 Miscellaneous  Q&A / Discussion

3 3 Legal & Financial Negotiations Technical Negotiations Validation of Beneficiaries Financial Viability Check (Excel) GPF / NEF Project Implementation Validation of beneficiaries:  The Grant Agreements can only be offer to (FP7) validated legal entities.  Each legal entity is validated only once for all participations in FP Big Picture (1/5) Negotiations = GA Preparations !!! Pink File Neg. Rep. Part A Part B ESR DoW Opening of Negotia- tions Draft Grant Agreement Selection & approval of winner Grant Agreement (CSJU ED signature) (Coordinator’s signature first) Date of CSJU ED signature = GA coming into force (Internal CSJU)

4 4 1.1 Big Picture (2/5) Project’s Start Fixed Starting Date Grant Agreement Start Date KoM Project Implementation Pre-financing – 45 days Standard procedure Grant Agreement Start Date KoM Project Implementation Pre-financing – 45 days Time gain Negotia -tions GA coming into force 1 st day of the month following the month when GA is signed A way to manage “eligible cost” & Time schedule of ITD

5 5 (Internal) Consortium Agreement (DESCA or IMG4 template) Coordi- nator TM Member of ITD Implementation Agreement or Accession to ITD’s Cons A. Grant Agreement 1.1 Big Picture (3/5) Legal dependencies CSJU Grant Agreement 2 nd step: Each and every beneficiary (all members of the consortium performing the project to sign Annex III – Form A – [3 copies] Accession of beneficiaries to the Grant Agreement !!! Those forms to be sent to the coordinator and to CSJU (CSJU to receive within 45 days from Project coming into force) 1 st step: The coordinator and Executive Director of CSJU to sign. CSJU does not interfere with it. CSJU is only to be notified in respect to the existence of the agreement. Payments

6 6 A2.5 ; A2.6 ; A4 !!! (Internal) Consortium Agreement (DESCA or IMG4 template) Coordi- nator TM Member of ITD Implementation Agreement or Accession to ITD’s Cons A. 1.1 Big Picture (4/5) Negotiation activities CSJU Grant Agreement DoW Neg. Rep. GPF/ NEF Financial Viability Check (Excel) !!! During the project implementation, the coordinator is obligated to send Periodic/Final reports to TM (except FormC/cost). PO cooperates with TM on approval

7 7 1.1 Big Picture (5/5) Reasons for postponing the pre-financing Notification whether the (internal) Consortium agreement is in place Excerpts from Art.1 of “core Grant Agreement”. 2. The coordinator shall send to the JU one duly completed and signed Form A per beneficiary at the latest 45 calendar days after the entry into force of the grant agreement… 3. Should any legal entity identified above, fail or refuse to accede to the grant agreement within the deadline … the JU is no longer bound by its offer to the said legal entity(ies). The consortium may propose to the JU … appropriate solutions to ensure the implementation of the project. Grant Agreement GA coming into force Pre-financing – 45 days Delivery of Form A to CSJU (within 45 days) Notification whether Implementation A. or Accession is in place CSJU will wait until All notifications are delivered CSJU will wait until All notifications are delivered Excerpts from “Core GA” Art.6 p.1 ….A pre-financing shall be paid to the coordinator within 45 days following the date of entry into force of this grant agreement. The coordinator shall distribute the pre-financing only to the beneficiaries who have acceded to the grant agreement !

8 8 1.2 Opening Negotiations (1/2) 2nd Introduction to the process and document’s templates  (from NEF) A2.5 ; A2.6 ; A4 (Bank account/Financial Identification) to be sent back to CSJU a.s.a.p  Financial Viability Check tool – as above, (all coordinators, exception - „public body”, and other beneficiaries requesting more than EUR ,  optional templates:  i) Negotiations report,  ii) Implementation Agreement/Accession,  iii) IMG4/DESCA template for consortium agreement  Reference documents/guidelines (e.g. IPR, DoW, Special Clauses, subcontracting, etc.) 1 st Letter Opening Negotiations  addressee: the coordinator and TM in cc:  Confirmation of commencing negotiations (already the Coordinator has been informed regarding „above threshold” status  (Tentative) deadlines  ESR

9 9 1.2 Opening Negotiations (2/2) Practical hints:  Status of PIC (ask PO !!!) – critical …. Potential slow down  A2.5 ; A2.6 ; A4, Financial Viability Check tool – important, please send it a.s.a.p.  Access to NEF by coordinator … check whether it works…  Ask PO for any clarification and help …  Do not hesitate to close negotiation session when you feel all relevant information is correct and in the system … There is no limit for number of Negotiation Sessions  In case you spot a „mistake” in submitted session … contact PO – next negotiation session would be open Practical hints:  Status of PIC (ask PO !!!) – critical …. Potential slow down  A2.5 ; A2.6 ; A4, Financial Viability Check tool – important, please send it a.s.a.p.  Access to NEF by coordinator … check whether it works…  Ask PO for any clarification and help …  Do not hesitate to close negotiation session when you feel all relevant information is correct and in the system … There is no limit for number of Negotiation Sessions  In case you spot a „mistake” in submitted session … contact PO – next negotiation session would be open 3rd Link to NEF (1st Negotiation Session)  addressee: the coordinator  all data for preparation of GA (please upload DoW!)  (Tentative) deadlines  in case more than 1 beneficiary – the coordinator could/should assign rights for filling in NEF

10 Financial/Legal Negotiations (1/2) The total costs, total eligible costs and the maximum CSJU financial contribution. Special attention should be given to the methodology to calculate the personnel costs and the indirect costs. A table of the estimated breakdown of the budget and the Community financial contribution per activity to be carried out by each of the beneficiaries is established. The amount of the pre-financing is established. The start date and the duration of the project are agreed upon (2 options: Fixed Starting Date OR Standard Starting Date) The operational capacity of the proposed coordinator to be verified, i.e. whether that organisation has the required management skills, capabilities and experience to carry out the coordinator’s role. The need for the inclusion in the Grant Agreement of any special clauses is established. Where applicable, a 'road map' is established for any planned competitive calls relating to the later addition of new project partners and the budget available for the Consortium's expansion agreed upon. The timing of the reporting periods is established. Any subcontracting or third-party issues must be clarified. (2 options for subcontracting) The financial capacity of the coordinator and any other applicant with an EC contribution exceeding EUR 500,000, except for public bodies, higher and secondary education establishments and entities whose participation is guaranteed by a Member State or an Associated Country, is assessed

11 11 Part A Part B Here: A 2.5 A 2.6 A4 (Financial Identification) Please upload NEF with DoW (version nr and the date of issue)

12 Technical Negotiations (1/2) The proposal may need to be adapted to meet the recommendations of the evaluation, as described in the Negotiation Mandate. The CSJU/TM verifies whether the project objectives are ' SMART ' (S-Specific, M-Measurable, A-Attainable, R-Realistic, T-Timely). The purpose: 1. DoW (Annex I to GA) => upload NEF! Please follow guidance for DoW contents 2. Negotiations Report Reporting Periods a) for TM supervision b) for GA (indicated in NEF) Starting Date Legal obligations against ITD (Implementation A. or Accession)

13 Technical Negotiations (2/2) The full work plan of the project has to be defined in sufficient detail. The work to be carried out by each of the beneficiaries and any potential future expansion of the consortium has to be defined in sufficient detail. The list of deliverables and their content, timing and dissemination level are agreed. The project milestones and their assessment criteria are agreed. An indicative time schedule for the project reviews, synchronized with the reporting periods, could be established (if not pre-defined in the special conditions of the Grant Agreement). 1.All (above mentioned) data in NEF 2.Data from NEF would be transferred to SESAME (reporting) 3.(Final) reporting not finalized yet 1.All (above mentioned) data in NEF 2.Data from NEF would be transferred to SESAME (reporting) 3.(Final) reporting not finalized yet

14 Practical hints for project implementation (1/4) The structure of Grant Agreement Annex VII – Form E Grant Agreement Core text Annex I - DoW Annex II – Gen Cond Annex III – Form A Annex IV – Form B Annex V – Form C Annex VI – Form D  Annex II – General Conditions (!!! Important to know)  Annex III – Form A – Accession of beneficiaries to the Grant Agreement  Annex IV – Form B – Request for accession of a new beneficiary  Annex V – Form C – Financial Statement  Annex VI – Form D – Terms of reference for the certificate on the financial ststements  Annex VII – Form E – Terms of reference for the certificate on the methodology Major Changes to “core text” or DoW via Amendments

15 Practical hints for project implementation (2/4) Project Implementation Final CSJU contribut. Periods Period 1 60 d Final Report Periodic Report Societal implication Recomme ndation: Plan for Using & Dissemin. (FP6) Plan for Using & Dissemin. 30 d 105 dFINAL Payment Interim Payment 105 d To be agreed: How CSJU is to be notified regarding acomplished deliverables ? (Copies in Periodic Reports)  Pre-financing ≤ 80% of CSJU contribution to first 18 month  Σ(Pre-financing + Interim payments) ≤ 80% CSJU contribution  Pre-financing ≤ 80% of CSJU contribution to first 18 month  Σ(Pre-financing + Interim payments) ≤ 80% CSJU contribution Examples of Payments at The end of this ppt

16 Practical hints for project implementation (3/4) Conclusions p.1  TM is focused on „technical part DoW” … do not forget: Dissemination and Exploitation Gender issue  Flexibility (tailoring to the case) is more than important: Starting date (eligibility of cost) is a challenge … (for coordinator:) in case of Fixed Starting date before GA is signed do „cash flow” in order to be sure the project is affordable Check „cash flow” against expected payments … to minimize risk of project failure; Reporting periods could be of different duration In case of „no financial records” or weak Financial Viability either amount of pre-financing or a collateral would be agreed/negotiated Ideally if Reporting periods corresponds to important milestones

17 17  Subcontracting (also described in DoW) … do not forget: Only minor topics No IPR (Intellectual Property Rights) Impossible between members of the consortium (Wind Tunnel Test is the exception)  Misunderstandings and challenging items: Reporting periods in Negotiations Report … it is intended as an input to Grant Agreement (independently from reporting to TM) Legal relationships between the project consortium and ITD … quite often TM doesn’t knows who within ITD deals with that issue (Legal Department of TM’s employer) Documents/Guidelines (and templates) are available in published CSJU Calls or CORDIS … in case of difficulties please contact PO for more than 1 beneficiary the project consortium agreement is to be concluded 1.5 Practical hints for project implementation (4/4) Conclusions p.2

18 Special case – not validated PIC (1/3) General purpose: the existence; the legal status; the operational capacity; and the financial capacity Categories of legal entities PIC status: Validated Temporary No PIC Opening Letter (requested documents) Should depend on PIC status NOT the case

19 19 Verification of existence and legal status (affects CSJU contribution rate !) For natural persons: i) A legible photocopy of the valid identity card or passport; ii) If applicable, an official VAT document. For public bodies: iii) A copy of the resolution, law, decree or decision establishing the entity in question; or, failing that, any other official document attesting to the establishment of the entity as a public body; iv) If applicable, an official VAT document. For other legal entities: v) A copy of any official document (e.g. official gazette, register of companies, etc) showing the participant's legal name and address and the registration number given to it by the national authorities; vi) A copy of the VAT registration document, if any, and only if the VAT number does not appear on the official document referred to above. The request for validation and supporting documents must be provided to Central Validation Team via Participants Portal (task for LEAR). 1.6 Special case – not validated PIC (2/3)

20 20 Financial viability check (affects garantee/collateral to GA) Purpose In order to be financially viable, a legal entity must be: liquid: capable of covering its short-term commitments; solvent: capable of covering its medium and long-term commitments; profitable: generating profits, or at least with self-financing capacity. 1.6 Special case – not validated PIC (3/3) all coordinators, exception - „public body”, and other beneficiaries requesting more than EUR , In case of „Not validated beneficiary” CSJU assists fast validation by CVT

21 21 Period 3 (12m)Period 1 (18m)  Pre-financing ≤ 80% of CSJU contribution to first 18 month  Σ(Pre-financing + Interim payments) ≤ 80% CSJU contribution  Pre-financing ≤ 80% of CSJU contribution to first 18 month  Σ(Pre-financing + Interim payments) ≤ 80% CSJU contribution Period 2 (12m) Max CSJU contribution: 200 k€ Max CSJU contribution: 100 k€ Actual/eligible cost*rate: 190 k€ Max CSJU contribution: 100 k€ Money owned by the consortium Money owned by CSJU Interim payment after P1: 140 k€ Final payment: 80 k€ Total: 400 k€ Pre-financing: 80 k€ A project: Max. CSJU contribution 400 k€ 80% k€ 20% - 80 k€ Actual/eligible cost*rate: 110 k€ Actual/eligible cost * “rate”: 140 k€ Interim payment after P2: 100 k€ Because ∑ of payments = 320 k€ ( ) Transfer of ownership of 80 k€ (pre-financing) 1.7 Examples of payments (1/4) A general case No Guarantee Fund (no deduction from pre-financing)

22 Examples of payments (2/4) Single Reporting Period A certificate on the financial statements shall be submitted for claims of interim payments and final payments when the amount of the JU financial contribution claimed by a beneficiary under the form of reimbursement of costs is equal to or superior to EUR , when cumulated with all previous payments for which a certificate on the financial statements has not been submitted. A certificate on the financial statements will be submitted in all cases at the end of the project for all costs for which a certificate on the financial statements has not been submitted previously. (Form D – Annex VI). Max. CSJU contribution: 100 k€ Pre-financing: ≤ 80 k€ Actual/eligible cost*rate: 98.5 k€ Final payment: 18.5 k€ Should be FormC certified/audited? No Guarantee Fund (no deduction from pre-financing) Periodic and Final Reports to be delivered

23 Examples of payments (3/4) Periodic report The consortium shall submit a periodic report to the JU for each reporting period and a copy of it (excluding the financial statements) to the responsible ITD member as defined in Annex I, within 60 days after the end of each respective period. The reporting shall comprise:  a) an overview, including a publishable summary, of the progress of work towards the objectives of the project, including achievements and attainment of any milestones and deliverables identified in Annex I. This report should include the differences between work expected to be carried out in accordance with Annex I and that actually carried out,  b) an explanation of the use of the resources, and  c) a financial statement, from each beneficiary together with a summary financial report consolidating the claimed JU contribution of all the beneficiaries in an aggregate form, based on the information provided in Form C (Annex V) by each beneficiary Reporting Tools SESAM & FORCEC

24 Examples of payments (4/4) Final report The consortium shall submit a final report to the JU and a copy of it to the responsible ITD member as defined in Annex I, within 60 days after the end of the project. The report shall comprise: a) a final publishable summary report covering results, conclusions and socioeconomic impact of the project. b) a report covering the wider societal implications of the project, including gender equality actions, ethical issues, efforts to involve other actors and spread awareness c) the plan for the use and dissemination of foreground. When providing a copy of their periodic and final reports to the responsible ITD member, the beneficiary(ies) may make the content of such reports subject to confidentiality provisions !!!. The coordinator shall submit a report on the distribution of the JU financial contribution between beneficiaries. This report must be submitted within 30 days after receipt of the final payment

25 Miscellaneous (1/3) Timing  “opportunity window for negotiations” … although, the deadlines in Negotiations Letter are indicative ones, please try to follow them (due to PO/CSJU workload missing deadlines could amplify “shift to the right”)  Project’s Kick-off (do not wait for Kick-off Meeting) … please start project’s activities as it is indicated in the Grant Agreement (and Negotiations Report/NEF)  Start with PIC and Implementation Agreement/Accession A. first…. as those issues are the most time consuming…

26 Miscellaneous (2/3)  “Clean Sky vs. FP7 Collaborative Research projects” …  No “Guarantee Funds” (5% of total max CS contribution is not deducted)  200 k€ threshold for audit on cost statements (instead of 375 k€)  Pre-financing calculated by PO  “technical side” supervised by TM (deliverables/milestones and Reports)  Payments after approval of Reports by PO  Communication via … please be precise with “subject”  Receipts … (deducted from payment)… be careful with indicating! II.17. Receipts of the project Receipts of the project may arise from: a) Resources made available by third parties to the beneficiary by means of financial transfers or contributions in kind which are free of charge: i. shall be considered a receipt of the project if they have been contributed by the third party specifically to be used on the project; ii. shall not be considered a receipt of the project if their use is at the discretion of the beneficiary's management. b) Income generated by the project: i. shall be considered a receipt for the beneficiary when generated by actions undertaken in carrying out the project and from the sale of assets purchased under the grant agreement up to the value of the cost initially charged to the project by the beneficiary; ii. shall not be considered a receipt for the beneficiary when generated from the use of foreground resulting from the project.

27 Miscellaneous (3/3) … years after 5 years End of project 10 years2 years A. II.9 Confidentiality A. II.10 Impact assesment A. II.22 Financial audits and controls A. II.23 Technical audits and reviews A. II.43 End of entitlements between JU and beneficiary A. II.23 Ethics audits A. II.25 Doubling of financial penaltis if repeated offence A. II.10 Contribution to standards (beneficiary initiative) A. II.25 Excluding from grants in case of an offence ≤ 2 years Keep original docs !

28 28 Q&A / Discussion

29 29 Thank You all


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