1. Sixth Framework Programme 2002-2006: Contracts è Legal Framework & General Principles è Contract Structure è Collective Approach l signature and entry into force l collective Responsibility l consortium Agreement è Provisions of general conditions, special reference to: l financial provisions l controls and sanctions

2. Legal Framework EC TREATY FRAMEWORK PROGRAMME SPECIFIC PROGRAMS PARTICIPATION AND DISSEMINATION RULES CONTRACTS Other relevant EC Regulations such as Financial Regulation INTERNATIONAL AGREEMENTS

3. General Principles Simplification Reduction of the number of contracts Collective approach Greater flexibility Greater autonomy for participants Reflect requirements of Rules for Participation

4. Contract Structure 4 Core contract (standard with specifics of project) 4 Annex I (technical tasks - work to be carried out) - the “project” 4 Annex II - general conditions (standard, applicable to every instrument) 4 Annex III - instrument specific provisions (variable per instrument) 4 May be supplemented by: :financial (including auditing, cost methodologies) :negotiation (including technical annex) :consortium agreement (including IPR) :project management (including reporting)

5. Signature and entry into force 4 Contractual link of all contractors with the Commission - New Contract enters into force upon signature of only coordinator and Commission 4 Coordinator must ensure other contractors sign within delays 4 Distribution of advance possible after minimum requirements met 4 Project begins in the date established in the contract (this can be before the contract enters into force but usually later)

6. Changes in consortium membership Where Community financial contribution static 4Consortium issues calls for proposals for new contractors - if identified in Joint Programme of Activities (networks of excellence) or Implementation Plan (integrated projects) 4Consortium evaluates proposals with independent experts 4Commission may object to extension of membership l Where Community financial contribution increased 4Commission issues call for proposals for new contractors

7. New Collective responsibility of the participants Technical Responsibility Financial Responsibility  Used as a last resort  Limited in proportion to the participant’s share to the project, up to the total amount they are entitled to receive  International Organisations, public bodies or entities guaranteed by MS/AS solely responsible for their own debts  Exceptions for specific actions for SME’s and fellowships, and when duly justified for specific support actions

8. Consortium agreement Regulates internal organisation and management of consortium New Compulsory unless otherwise mentioned in the call for proposal Between contractors - NOT signed nor approved by the Commission After or (preferably) before signing the contract but some decisions must be made by the participants before signature of contract (e.g. exclusion of pre-existing know-how) Non binding guidelines provided by the Commission

9. Financial Provisions Identification of costs New Cost categories gone Costs must be : actual, economic and necessary for the project; incurred during the duration of the project; recorded in the accounts; follow contractors own accounting rules and must exclude indirect taxes, duties, interest, costs reimbursed in respect of another Community project and not give rise to profit Audit certificates by external auditor - in some instruments each partner each year (IP/NoE) for public bodies - competent public auditor

10. Financial Provisions Payment Modalities 3 Periodic advances l yearly for IP and NoE l to be specified in the contract for other instruments l up to 85% (80% for instruments without collective liability) 4 EC contribution depends on: l contractor’s cost model (AC, FCF, FC) l type of activity (research, demonstration, management, training etc.)

11. Financial Provisions Cost Models FC: actual direct and indirect costs New FCF (variant of FC): actual direct costs + flat rate for indirect costs ACF: actual additional direct costs + flat rate for indirect costs

12. Audits and Controls è Controls 4 Reports Periodic activity reports Periodic financial reports Supplementary reports if foreseen (in Annex I or III) 4 New annual monitoring by Commission with external experts (obligation for IP and NoE) è Audits 4 Scientific, technological, and financial audits 4 Ethical or other reviews

13. Sanctions Exclusion criterion: financial irregularity Recovery decisions (art. 256 EC Treaty) Other sanctions in contracts (overclaims)

14. Other Provisions of General Conditions 3Force Majeure 3Prolongation and suspension of the Project 3Amendments 3Termination

15. Financial Provisions Reimbursement rates of eligible costs 1. Under the condition that the costs of the project are superior to the contribution. Should the costs of the project be equal to or lower than the contribution, the reimbursement rate will be readjusted.