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FP6 Financial Info & FAQs --> Proposal --> Third Parties --> Third Parties FAQs

Q:

Our university is going to represent in an NoE itself and two other institutions. I heard that this might be done under clause 23 or the two other institutions might be considered third parties. What are the benefits or drawbacks of applying the clause 23 versus treating two other institutions as third parties?

A:

"Normal" third parties report via the contractor, who is responsible for their financial and activity/technical reporting. Form C is a single report for the contractor and the third parties "under his control" and there is a single audit report for the contractor and third parties together. The third parties have no financial responsibility, which falls entirely on the contractor who is in charge.

 

Under clause 23 associations can report as third parties and each is responsible for reporting with separate forms C and audit reports.

 

Thus:

Special Clause 23: “participation” of members of entities such as EEIG, SME Assoc, UMR:

-          the legal entity (EEIG/SME assoc) or one member are contractors (UMR)

-          their members can do some of the work on the   project even though they are third parties

-          the third parties, the agreement and the tasks must be identified in Annex I

-          each member provides a separate Form C and audit certificate and uses its cost model

 

Generally, third parties have no rights or obligations vis-א-vis EC or other contractors

          Contractor is responsible for:

         ensuring all work is carried out

         any IPR generated is protected and used and available for any necessary access rights (via subcontract or agreement with third party) ensuring that third party meets requirements (auditing etc). 

         However, resources made available by third parties on the basis of an agreement between the contractor and the third party existing prior to its contribution to the project can be an eligible costs for the contractor

          The tasks and their execution by such third parties are clearly identified in the Annex I

          Costs will have to be incurred in accordance with the usual accounting principles of such third parties and be recorded in the accounts of this third party - to be covered by audit certificates

          Contractors shall ensure that third parties whose resources are made available to the project are informed on the use of their resources

 

In order to use clause 23 in the case quoted, the three universities need to be a single entity - we quote clause 23 in full:

 

"ENTITIES COMPOSED OF ONE OR MORE LEGAL ENTITIES [EEIGS/ JOINT RESEARCH UNITS (UNITֹS MIXTES DE RECHERCHE ETC.) / ENTERPRISE GROUPINGS]

1. [Option A : For Joint research units ] The contractor [name of the contractor] represents also the following members of [name of the JRU] (referred to in this special clause as

member(s)”)

--[name of the legal entity].

---[name of the legal entity].]

[Option B: For legal entity composed of legal entities, i.e EEIG, Enterprise groupings.. ] The contractor [name of the contractor] represents also its members (referred to in this

special clause as “members”)

2. The contractor may charge costs incurred by the members in carrying out the project, in accordance with the provisions of the contract. These costs shall not be considered as receipts of the project.

The members shall identify the costs to the project in accordance with the provisions of part B of the contract. Each member shall apply a cost reporting model in accordance with the principles established in articles II.19, II.20 and II.21. The contractor shall provide to the Commission:

- an individual financial statement from each member in the format specified in Form C. These costs shall not be included in the contractor’s Form C

- an audit certificate from each member in accordance with the relevant provisions of this contract

- a summary financial report consolidating the sum of the eligible costs borne by each member and the contractor, as stated in their individual financial statements, shall be appended to the contractor’s Form C.

When submitting reports referred to in Article II.7, the consortium shall identify work performed and resources deployed by each member.

3. The eligibility of the member’s costs charged by the contractor is subject to controls and audits of the members, in accordance with Article II.29.

4. The contractor shall retain sole responsibility toward the Community and the other contractors for its members. The contractor shall ensure that the members abide by the provisions of the contract."



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