6. Grants

6.1. What is a grant?

6.1.1. Definition

A grant is a financial donation/non-commercial payment by the contracting authority from the general budget of the European Union or the European Development Fund (EDF) given to a natural or legal person (the grant beneficiary) to finance:

• either an action intended to help achieve a European Union policy objective (action grant);

• or the operation (i.e. the running costs) of a body which has an objective forming part of, and supporting, a European Union policy (operating grant) [1].

In the case of an operating grant, the grant must take the form of a financial contribution to the work programme of the entity.

A grant contract differs from a procurement contract in a number of ways:

A grant is made for an action, proposed to the contracting authority by an applicant, which falls within the normal framework of the applicant’s activities. This is in contrast to a procurement contract, in which the contracting authority draws up the terms of reference/tender specifications for a project it wants to be carried out. A grant beneficiary is responsible for implementing the action and owns the results. By contrast, under a procurement contract, it is the contracting authority who owns the results of the action.

A grant beneficiary generally contributes to the financing of the action unless exceptions apply (Section 6.2.8.). In the case of procurement contracts, the contractor does not contribute financially. The amount of a procurement contract represents a price fixed in accordance with competitive tendering rules.

No grant may give rise to profits, it must only balance income and expenditure for the action, but there are some exceptions (Section 6.2.9.). It is important to note, that the no-profit rule applies to the action and not necessarily to the grant beneficiary: the fact that a body is non-profit making does not mean that it can only conclude grant contracts; and vice-versa, profit making bodies may also participate in grant award procedures [2].

The action must be clearly identified. No action may be split for the purpose of evading compliance with the rules laid down in this practical guide.

No grant contract can be signed unless the action meets the above requirements.

6.1.2. Actors involved

There are three kinds of actors that may receive funding under a grant contract:

The lead applicant – who will be become the beneficiary (coordinator) following the award of the grant

The body(ies) signing a grant contract is known as the grant beneficiary(ies) and should not be confused with the partner country, the final beneficiary of the operation [3] nor with the target group [4].

If awarded the grant contract, the lead applicant will become the beneficiary identified as the coordinator in the special conditions of the grant contract.

The coordinator is the main interlocutor of the contracting authority. It represents and acts on behalf of the co-beneficiary(ies) (if any) and coordinates the design and implementation of the action.

Co-applicants (if any) – who will become the co-beneficiaries following the award of the grant

The lead applicant may act individually (“mono-beneficiary grant”) [5] or with co-applicant(s) (“multi-beneficiary grant”): however, if awarded the grant contract, both the lead applicant and the co-applicant(s) (if any) become grant beneficiary(ies).

Co-applicant(s) participate in designing and implementing the action, and the costs they incur are eligible in the same way as those incurred by the lead applicant.

and

Affiliated entities (if any)

Only the lead applicant and co-applicants will become parties to the grant contract.

Their affiliated entities [6] are neither beneficiaries of the action nor parties to the contract. However, they participate in the design and in the implementation of the action and the costs they incur (including those incurred for implementation contracts and financial support to third parties) may be eligible, provided they comply with all the relevant rules already applicable to the beneficiaries under the grant contract. Affiliated entities must satisfy the same eligibility criteria as the lead applicant or the co-applicant to which they are affiliated.

Only entities having a structural link with the applicants, in particular a legal or capital link, may be considered as affiliated entities to the lead applicant and/or to co-applicant(s).

This structural link encompasses mainly two notions:

1. Control, as defined in Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC [7].

   Entities affiliated to a beneficiary may hence be:

• Entities directly or indirectly controlled by the beneficiary (daughter companies or first-tier subsidiaries). They may also be entities controlled by an entity controlled by the beneficiary (granddaughter companies or second-tier subsidiaries) and the same applies to further tiers of control.

• Entities directly or indirectly controlling the beneficiary (parent companies). Likewise, they may be entities controlling an entity controlling the beneficiary.

• Entities under the same direct or indirect control as the beneficiary (sister companies).

2. Membership, i.e. the beneficiary is legally defined as an e.g. network, federation, association in which the proposed affiliated entities also participate or the beneficiary participates in the same entity (e.g. network, federation, association) as the proposed affiliated entities.

The structural link must be neither limited to the action nor established for the sole purpose of its implementation. This means that the link would exist independently of the award of the grant; it should exist before the award procedure and remain valid after the end of the action.

By way of exception, an entity may be considered as affiliated to a beneficiary even if it has a structural link specifically established for the sole purpose of the implementation of the action in the case of so-called ‘sole applicants’ or ‘sole beneficiaries’. A sole applicant or a sole beneficiary is a legal entity formed by several entities (a group of entities) which together comply with the criteria for being awarded the grant. For example, an association is formed by its members.

What is not an affiliated entity?

The following are not considered entities affiliated to a beneficiary:

1. entities that have entered into a (procurement) contract or sub-contract with a beneficiary, act as concessionaires or delegatees for public services for a beneficiary;

2. entities that receive financial support from the beneficiary;

3. entities that cooperate on a regular basis with the beneficiary on the basis of a memorandum of understanding or share some assets;

4. entities that have signed a consortium agreement under the grant contract (unless this agreement implies the creation of a sole applicant as described above).

How to verify the existence of the required link with the beneficiary?

The affiliation resulting from control may be proved in particular on the basis of the consolidated accounts of the group of entities the beneficiary and its proposed affiliates belong to.

The affiliation resulting from membership may in particular be proved on the basis of the statutes or equivalent act establishing the entity (network, federation, association) that the beneficiary constitutes or in which the beneficiary participates.

If the analysis of the accounts or of the statutes does not provide for a clear-cut affiliation between the applicant and the entity that it presents as its affiliate, the entity may be treated as separate co- applicant in the same proposal. The change in the treatment of that entity, from an affiliated entity to a co-applicant, is not to be considered substantial and falls within the scope of corrections that may be made during the finalisation phase of the grant contract.

Affiliated entities are only relevant for action grants, not for operating grants.

The following entities are neither applicants nor affiliated entities:

• Associates

  Other organisations or individuals may be involved in the action. Such associates play a real role in the action but may not receive funding from the grant, with the exception of per diem or travel costs. Associates do not have to meet the eligibility criteria referred to in Section 2.1.1. of the Guidelines for applicants.

• Contractors

  The grant beneficiaries and their affiliated entities are permitted to award contracts. Associates, beneficiaries, affiliated entities, recipients of financial support cannot be also contractors in the project.

• Recipients of financial support

  If financial support is allowed under the relevant grant contract, the grant beneficiaries and affiliated entities may award financial support to third parties. These third parties are neither affiliated entities nor associates nor contractors.

6.2. General principles

6.2.1. Management modes

Grants awarded under direct management and indirect management with partner countries are covered by the rules set out in this chapter. See Section 2.2.

6.2.2. Who can participate?

6.2.2.1. Nationality rule

See Section 2.3.1.

Participation in grant award procedures is open on equal terms to all natural and legal persons and to entities that do not have legal personality under the applicable national law, provided that their representatives have the capacity to take on legal obligations on their behalf and that they offer financial and operational guarantees equivalent to those provided by legal persons. Furthermore, applicants must be nationals of, or effectively established in, an eligible country in accordance with the applicable external financing instrument (for more details see Section 2.3.1.).

6.2.2.2. Exceptions to the nationality rule

See Section 2.3.7.

6.2.2.3. Grounds for exclusion and EU Restrictive Measures

See Section 2.4.

6.2.3. Programming: Financing Decisions/action plan

Grants under direct management are subject to a financing decision, which at the same time constitutes the action plan. The financing decision/action plan indicates the external financing instrument, if any, the objectives pursued, the expected results, the method of implementation, the type of applicants targeted by the grant award procedure and the global budgetary envelope reserved for the grants. The financing decision/action plan is adopted by the European Commission [8].

6.2.4. Transparency

See Section 2.5.2.

6.2.5. Equal treatment

See Section 2.5.2.

6.2.6. Non-cumulative award and no double funding

See Section 2.5.2.

6.2.7. Non-retroactivity

See Section 2.5.2.

Action grants

The general principle is that actions can only start after signature of the grant contract.

Exceptionally, a grant may be awarded for an action that has already begun where the applicants can demonstrate and justify the need to start the action before the contract is signed. In this case, expenditure incurred before the submission of grant applications is, as a general rule, not eligible for financing [9].

The acceptance of costs from an earlier date [10] (i.e. before submission of grant applications) is possible only in duly substantiated exceptional cases [11]:

1. in duly justified exceptional cases as provided for in the basic act; or

2. in the event of extreme urgency where an early engagement by the Union would be of major importance, for the purposes of humanitarian aid, emergency support operations, civil protection operations or for crisis management aid and in other exceptional and duly substantiated emergencies.

   In the cases referred in b), the costs incurred by a beneficiary before the date of submission of the application shall be eligible for Union financing under the following conditions:

1. the reasons for such derogation have been properly substantiated by the contracting authority;

2. the grant agreement explicitly sets the eligibility date earlier than the date for submission of applications.

The relevant eligibility date should also be included in the guidelines for applicants.

No grant may be awarded retroactively for actions already completed.

In case of grants comprising financing not linked to costs, results cannot have been achieved before the agreement is signed.

Operating grants

See Section 6.6.2.

6.2.8. Co-financing

See Section 2.5.2.

As general rule, a grant may not finance the entire cost of the action or the entire operating expenditure of a beneficiary.

When making use of financing not linked to costs, the co-financing rule does not apply to the financing not linked to costs component of the action (Section 6.3.1.5.).

However, the following exceptions apply to the rule of co-financing:

The co-financing may take the form of the beneficiary's own resources (self-financing), income generated by the action and financial or in kind contributions from third parties. The beneficiary has to declare the co-financing actually provided in the final report. The beneficiary(ies) may at that point replace any planned contribution from its own resources with financial contributions from third parties.

The contracting authority may accept contributions in kind as co-financing, if considered necessary or appropriate. Co-financing in kind means the provision of goods or services to the grant beneficiary free of charge by a third party. Therefore, contributions in kind do not involve any expenditure for the grant beneficiary [12]. For the purpose of the no-profit rule (see Section 6.2.9.), in kind contributions are not taken into account.

If contributions in kind are accepted as co-financing, the beneficiary(ies) must ensure they comply with national tax and social security rules.

Contributions in kind from third parties, with the exception of in kind contributions in the form of volunteers’ work [13], must be presented separately from the contributions to the eligible costs in the estimated budget (like non eligible taxes, they are presented as accepted costs in the estimated budget for the action). Their approximate value must be indicated in the estimated budget and must not be subject to subsequent changes.

6.2.9. No-profit rule

See Section 2.5.2.

Grants may not have the purpose or effect of producing a profit within the framework of the action or the work programme, with the exception of some specific cases (see below) as provided for in the special conditions of the standard grant contract.

Profit is defined as a surplus of the receipts over the eligible costs approved by the contracting authority when the request for payment of the balance is made.

The receipts to be taken into account are the consolidated receipts on the date on which the payment request for the balance is made by the coordinator that fall within one of the two following categories:

1. European Union grant;

2. income generated by the action; unless otherwise specified in the special conditions.

In case of an operating grant, amounts dedicated to the building up of reserves must not be considered as a receipt.

When a grant takes the form of simplified cost options (total or partially) (see Section 6.3.3.), these amounts shall be established in such a way as to exclude profit a priori. Once the amounts are established in the contract, these cannot be challenged by ex post controls, i.e. through comparison with the actual costs they cover (see Section 6.3.3.).

Where a profit is made, the contracting authority has the right to reduce the final amount of the grant by the percentage of the profit corresponding to the final European Union contribution to the eligible costs incurred approved by the contracting authority (without making a difference between costs actually incurred and simplified cost options), except in the cases listed below.

The no-profit rule does not apply to [15]:

1. actions the objective of which is the reinforcement of the financial capacity of a beneficiary. Where applicable, this must be specified in Article 7 of the special conditions;

2. actions that generate an income to ensure their continuity after the period of Union financing provided for in the grant contract. Where applicable, this must be specified in Article 7 of the special conditions;

3. study, research, training or education support paid to natural persons or other direct support paid to natural persons most in need, such as unemployed persons and refugees. Where applicable, this must be specified in Article 7 of the special conditions;

4. actions implemented by non-profit organisations;

5. grants in the form of financing not linked to costs of the relevant operations;

6. low value grants (i.e. grants of EUR 60 000 or less).

6.2.10. Ethics and values

See Section 2.5.6.

In addition, for all grant award procedures (calls for proposals or direct award) where the requested grant exceeds EUR 60 000, lead applicants, co-applicants and affiliated entities other than (i) natural persons (ii) pillar-assessed entities and (iii) governments and other public bodies whose application has been awarded a grant, shall assess their internal policy against sexual exploitation, abuse and harassment (SEA-H) through a self-evaluation questionnaire with the aim to inform the contracting authority about the entity’s SEA-H policy in place and the measures envisaged in order to improve the SEA-H policy within the relevant organisation [16].

6.3. Forms of grants

6.3.1. General

Grants may take any of the following forms [17]:

1. financing not linked to costs of the relevant operations based on:

1. either the fulfilment of conditions set out in sector specific legislation or European Commission Decisions; or

2. the achievement of results measured by reference to previously set milestones or through performance indicators;

2. reimbursement of eligible costs that may be based on any or a combination of the following forms:

1. actual costs incurred by the beneficiary(ies) and affiliated entity(ies);

2. one or more simplified cost options, which may take the form of:

• unit costs: which cover all or certain specific categories of eligible costs that are clearly identified in advance by reference to an amount per unit;

• lump sums: which cover in global terms all or certain specific categories of eligible costs that are clearly identified in advance;

• flat-rate financing: which covers specific categories of eligible costs, which are clearly identified in advance, by applying a percentage;

3. a combination of the forms referred to in points (a) to (b).

6.3.2. Reimbursement of costs

The most common form of grants is the reimbursement of eligible costs (cost-based grants).

Cost based grants can be divided into two categories: reimbursement of actual eligible costs or simplified cost options (unit costs, lump sum or flat rate). On simplified cost options see also Sections 6.3.3. and 6.3.4.

These forms of reimbursement can be combined to cover different categories of eligible costs, provided the limits and conditions stated in the call for proposals are complied with.

A cost based grant is expressed both as:

1. a maximum amount (absolute value) established on the basis of:

1. estimated eligible costs, in the case of reimbursement of eligible costs actually incurred;

2. the overall amount of estimated eligible costs clearly defined in advance in the form of simplified costs options.

2. a percentage of the estimated eligible costs (for actual costs) or of the simplified cost options.

This means that the contracting authority's contribution covers only a certain percentage of the costs, according to the rules set out in the call for proposals. The call for proposals also establishes the maximum and minimum amounts of the contribution. In any case, the grant shall not exceed the overall ceiling expressed in terms of an absolute value (‘maximum grant amount’).

6.3.3. Simplified cost options

Where simplified cost options are used, the eligible costs of an action are calculated according to a predefined method based on outputs/results or some other costs clearly identified in advance either by reference to an amount per unit or by applying a percentage.

Simplified cost options are, thus, an alternative method for calculating the eligible costs of an action opposed to the traditional method by which the grant is calculated on the basis of the costs actually incurred and paid. Thus, simplified cost options are amounts or percentages that represent the best possible approximation of actual (real) eligible costs incurred in practice when implementing an action.

Simplified cost options may take the form of unit costs, lump sums and/or flat-rates or a combination of these forms [18]. They are meant to simplify the management of the grant. It should be noted that there is no limitation (other than the total amount of estimated eligible costs) on the amount of costs that can be declared in the form of simplified cost options.

Only two types of simplified cost options are possible:

(1) determined by the contracting authority that shall apply to all applicants in the award procedure and announced in the guidelines [19]. For example, unit costs applied to determine the amount of co-financing in the form of volunteer costs, see Section 6.2.8.

These simplified cost options may take the form of:

• unit costs: covering all or certain specific categories of eligible costs which are clearly identified in advance by reference to an amount per unit.

• lump sums: covering in global terms all or certain specific categories of eligible costs which are clearly identified in advance.

• flat-rate financing: covering specific categories of eligible costs which are clearly identified in advance by applying a percentage fixed ex ante.

(2) single lump sum [20]: a lump sum may cover the entire eligible costs of an action or a work programme. Single lump sums may be determined on the basis of the estimated budget, which should comply with the principles of economy, efficiency and effectiveness. Compliance with these principles must be verified ex ante at the time of evaluation of the grant application. When using this form of financing, the description of the action must include detailed information on the essential conditions triggering the payment, including, the achievement of outputs and/or results.

Other simplified cost options are not acceptable. Simplified cost options embedded in the accounting practices of the beneficiary are not acceptable, except in the case of direct awarded grants to pillar assessed entities (Section 6.9.1.).

The contracting authority shall check, at the latest before the payment of the balance:

1. the fulfilment of the conditions triggering the payment of the simplified costs options, including, the achievement of outputs and/or results. The conditions triggering the payment do not require reporting on the costs actually incurred by the beneficiary.

2. that the simplified costs options were indicated in the estimated overall budget; and

3. that the conditions referred to in point (a) were fulfilled during the implementation period. On the other hand, there will be no check whether the costs underlying the simplified costs options were incurred during the same period.

In addition, the fulfilment of those conditions may be subject to ex post controls. However, once the amounts have been assessed and approved by the contracting authority (as clearly laid down in the budget of the action), they will not be challenged by ex post controls.

This means that auditors will not check all the supporting documents to establish the actual costs incurred, but they will concentrate on the correct application of the formula used and the related inputs or generating events as established in the contract. Auditors will not check the actual costs to verify the generation of a profit or a loss, even though the auditors and/or the European Commission have the right to access the statutory records of the beneficiary, notably its general accounting statements, for statistical, methodological or anti-fraud purposes (as applicable to all forms of grants) according to article 16 of the general conditions. This means that the beneficiary has to keep supporting documents establishing that the grant has been effectively implemented.

6.3.4. Financing not linked to costs

Financing not linked to costs [21] (FNLC) aims at increasing the focus on results and simplifying the administrative and financial procedures.

FNLC is a form of reimbursement based on the fulfilment of certain conditions ex ante or the achievement of results.

The FNLC amounts are not defined based on an estimation of costs, the reimbursement is not linked to costs (actually incurred or estimated).

Contrary to cost-based grants, a grant in the form of FNLC is only expressed as an absolute amount (no percentage). The final amount is established in accordance with the relevant arrangements set out in the budget and the description of the action.

In addition, the provisions on co-financing, no double funding do not apply to the FNLC component of a grant since they cannot be applied in a case where the amount to be reimbursed is linked to defined conditions or results and is decoupled from the underlying costs [22].

The no-profit rule does not apply (see Section 6.2.1.9.) and, given the nature of FNLC, this form of contribution should not be used for results achieved before the agreement is signed (see Section 6.2.7.).

In case of hybrid grant contracts (combining reimbursement of eligible costs and financing not linked to costs), it is important to distinguish each component and the amount of the Union contribution to each, as each of them is subject to different rules, and the final amount of the grant per component will be calculated in a different way.

6.4. Grant award procedures

6.4.1. Call for proposals

Grants must be awarded following the publication of a call for proposals, except in the cases listed in Section 6.4.4. below. Please see Section 6.5.

6.4.2. Types of call for proposals: Open or restricted

Call for proposals are either open or restricted:

• restricted: a two-step procedure where all applicants may ask to take part but only the applicants who have been shortlisted (on the basis of a concept note in response to a call launched through published guidelines for applicants) are invited to submit a full application.

• open: all applicants are free to submit a full application. In this case a concept note must still be submitted together with the full application and the evaluation process is carried out in two steps (shortlisting on the basis of the concept note), in accordance with the published guidelines for applicants (see Section 6.5.2.).

Calls for proposals are by default restricted. A decision to launch an open rather than a restricted call must be justified by the particular technical nature of the call, the limited budget available, the limited number of proposals expected or organisational constraints (e.g. calls by regional European Union delegations).

6.4.3. Financial framework partnership agreements

Grant contracts may take the form of financial framework partnership agreements with a view to establishing a long-term cooperation between the Commission and beneficiaries implementing European Union funds [23] [24]. Financial framework partnership agreements must specify the forms of financial cooperation, including the obligation to set out, in the specific agreements signed arrangements for monitoring the achievement of specific objectives. In addition, in case the financial partnership agreements takes the form of a grant, it must specify the nature of actions planned on a one-off basis or as part of an approved work programme, the procedure for awarding specific grants, in compliance with the principles and procedural rules in this practical guide and the general rights and obligations of each party under the specific contracts. The duration of the partnership may not exceed 4 years, save in duly justified cases clearly indicated in the annual activity report. Financial framework partnership agreements are treated as grants for the purposes of programming, ex ante publication and the award procedure.

Financial framework partnership agreements should only be envisaged if their use has a clear extra value. For example, if only one specific grant is foreseen, financial framework partnership agreements are not the appropriate modality.

6.4.4. Direct award

In the following circumstances, it is not necessary to organise a call for proposals for the award of a grant [25]:

1. exceptional and duly substantiated emergencies (urgency);

2. where the grant is awarded to a body with a de jure or de facto monopoly, duly substantiated in the award decision. ‘De facto’ or ‘de jure’ monopoly means that the grant beneficiary:

• has exclusive competence in the field of activity and/or geographical area to which the grant relates pursuant to any applicable law; or

• is the only organisation (i) operating or (ii) capable of operating in the field of activity and/or geographical area to which the grant relates by virtue of all considerations of fact and law.

3. where the grant is to be awarded to a body identified by the relevant basic act [26], as beneficiary of a grant or to bodies designated by the Member States, under their responsibility, where those Member States are identified by a basic act as beneficiaries of a grant.

   Note that ‘basic act’ refers to the external financing instrument. It is not sufficient to identify a body for a direct award in financing decisions/action plan, as these do not constitute basic acts;

4. in case of research and technological development, to bodies identified in the work programme, where the basic act expressly provides for that possibility, and on condition that the action does not fall under the scope of a call for proposals;

5. for actions with specific characteristics that require a particular type of body on account of its technical competence, its high degree of specialisation or its administrative power, on condition that the actions concerned do not fall within the scope of a call for proposals;

6. for NDICI-GE, IPA III and DOAG financed actions [27]:

1. low-value grants to human rights defenders to finance urgent protection actions and needs, including through mechanisms for the protection of human rights defenders at risk, as well as to mediators and other civil society actors involved in crisis and armed conflict related dialogue, conflict resolution, reconciliation and peacebuilding, where appropriate without the need for co-financing;

2. grants, where appropriate without the need for co-financing, to finance actions in the most difficult conditions where the publication of a call for proposals would be inappropriate, including situations where there is a serious lack of fundamental freedoms, including violation of human rights, threats to democratic institutions, escalation of crisis or armed conflict, where human security is most at risk or where human rights organisations and defenders, mediators and other civil society actors involved in crisis and armed conflict related dialogue, reconciliation and peacebuilding operate under the most difficult conditions; such grants shall not exceed EUR 1 000 000 and their duration shall not exceed 18 months, which may be extended by a further 12 months in the event of objective and unforeseen obstacles to their implementation;

3. low value grants to civil society organisations using, to the extent possible, simplified forms of financing in accordance with Article 125 of the Financial Regulation.

In the case of grants awarded without a call for proposals, even though an evaluation committee may be useful, it is not compulsory.

In all cases, the contracting authority must prepare a report explaining the manner in which the grant beneficiary was identified and the grant amounts established, and the grounds for the award decision (see template evaluation report — Annex a10a). The contracting authority must follow the steps shown in the evaluation report template and ensure that all the basic principles for grants are respected (including eligibility, operational & financial capacity, and exclusion). Even if the beneficiary is designated in the basic act or it is in a monopoly situation the financial capacity always has to be verified as the financial interests of the European Union have to be protected.

The procedures described in Section 6.5.10. must be followed by analogy, with the evaluation report referred to in the previous paragraph being included in the contract dossier. Application form (Annex e3b) and guidelines for applicants (Annex e3a) can be used and adapted for direct award.

6.4.5. IT Management Tools

6.5. Calls for proposals

The timeline and the different stages of restricted and open calls for proposals can be summarised as follows:

6.5.1. Publicity

Calls for proposals are published on the website of DG International Partnerships and/or the F&T Portal [29], and in any other appropriate media (other websites, specialised press, local publications [30], etc.).

To ensure the widest possible participation and the requisite transparency, every call for proposals must include guidelines for applicants.

The guidelines for applicants are published on the websites referred above. They should also be available in hard copy from the contracting authority. They should be available in the language(s) appropriate to the call for proposals.

If the contracting authority is not a service of the European Commission headquarters, it must arrange local publication directly at the same time as they are published on the designated website.

Since the cost of publishing the entire guidelines for applicants in the local press might be prohibitive, the template in Annex e2 prescribes the minimum information that is required for local publication. Those guidelines must be available at the address stated in the local publication.

6.5.2. The guidelines for applicants

The guidelines for applicants explain the purpose of the call for proposals, the rules on eligibility of applicants, the types of action and costs that are eligible for financing, and the evaluation (selection and award) criteria (see template guidelines for applicants, Annex e3a).

In order to make more efficient use of calls for proposals the contracting authority may group calls for proposals for different instruments (it may then be advisable to divide the calls into lots [31]) and/or use the budget of several successive years. In the latter case, a suspensive clause must be included for the years for which budgetary appropriations are not yet available (see Section 2.5.9). Calls may also cover several countries of one region and group the related budgetary appropriations.

They also contain instructions on how to fill in the application form, which other documents to submit and which procedures to follow for applying. They give information on the evaluation process that will follow (including an indicative timetable) and the contractual conditions applying to successful applicants.

The guidelines include amongst other annexes the application form.

The guidelines for applicants should set out very clearly and in detail the objectives and priorities of the call for proposals, and give particular attention to the eligibility criteria.

It is advisable to clarify and limit the priorities and objectives of calls and to clearly explain the eligibility criteria for applicants (see Section 6.5.3. below) to ensure that only adequate applications will be submitted.

At the discretion of the contracting authority, the guidelines for applicants may be translated into the local language(s) for information purposes. However, in case of discrepancies between two or more language versions, applicants must refer to the language version that prevails, as indicated by the contracting authority. The guidelines for applicants will specify in which language applications must be submitted, and all further correspondence as well as the contracts should be in the same language.

6.5.3. Eligibility and evaluation criteria

6.5.3.1. Eligibility criteria

The eligibility criteria determine the conditions for participating in a call for proposals. They must be drafted with due regard to the objectives of the action and be transparent and non-discriminatory. The eligibility criteria apply to two different points:

• Eligibility of the applicants: this refers to the applicants' legal and administrative status - see in particular Sections 2.3.1. and 2.4. (rules on nationality, EU Restrictive Measures and grounds for exclusion). If a call for proposals relates to actions that might or need to be implemented by several entities, the minimum, maximum or the recommended number of entities and the eligibility criteria applicable to each entity or to all together must be specified.

• Eligibility of the action: this refers to the types of activities, sectors or themes and geographical areas covered by the call for proposals.

6.5.3.2. Evaluation criteria: selection and award

The evaluation criteria consist of selection and award criteria, all of which are defined in the evaluation grid.

• The selection criteria are used to assess the lead applicant's financial capacity as well as the lead applicant's and the co-applicant(s)'s (and their affiliated entity(ies)) operational capacity to complete the proposed action:

• • • the lead applicant must have stable and sufficient sources of funding to keep operating throughout the action implementation period and to participate, where appropriate, in its funding;

    • applicants (and their affiliated entity(ies)) must have altogether the necessary experience, professional competencies and qualifications to complete the proposed action.

The financial capacity has always to be verified [32], except where the lead applicant belongs to one of the following categories [33]: natural persons in receipt of education support, natural persons most in need and receiving direct support, public bodies (including Member State organisations), international organisations, or persons or entities applying for very low value grants.

The contracting authority may, depending on a risk assessment, waive the obligation to verify the operational capacity of public bodies, Member State organisations or international organisations [34].

Assessments are made on the basis of the information and supporting documents submitted in the context of the call for proposals (see Section 6.5.6.). Supporting documents may include an external audit report of the lead applicant, the profit and loss account and the balance sheet for up to the three last financial years for which the accounts were closed. In case of doubts about the capacity of the applicants, the evaluation committee may ask for additional proof.

• The award criteria are used to assess proposals against the set objectives and priorities, so that grants are awarded to actions that maximise the overall effectiveness of the call for proposals. They should enable the contracting authority to select proposals that will comply with its objectives and priorities and guarantee the visibility of the European Union financing.

  The award criteria relate, in particular, to the relevance of the action and its compatibility with the objectives of the grant programme under which the call for proposals is being financed; the quality, expected impact and sustainability of the action, and its efficiency.

All eligibility and evaluation criteria specified in the call for proposals must be applied as specified and cannot be changed in the course of the procedure. The criteria should be precise and non-discriminatory (see the evaluation grid templates).

6.5.4. Additional information before the deadline for submission of proposals

It is highly advisable, after the launch of the call for proposals, to hold one or more information sessions that all the potential applicants can attend. Such information sessions must take place at the latest 21 days before the deadline for submission of the concept notes [35]. Moreover, information sessions can also be organised at the latest 21 days before the deadline for submission of the full application for applicants whose concept notes have been pre-selected.

Any presentation/documentation to be delivered in the information session must also be uploaded at least on the website, where the call was published. In direct management the dates, locations and presentations for information sessions on global calls for proposals must be coordinated with the European Commission headquarters. The information to be disseminated in all targeted regions must be harmonised in a non-discriminatory way.

In addition, during the time between the publication and the deadline for the submission of the concept note/full application [36], applicants can ask questions to help them fill in the form and put together their applications. The contracting authority should therefore provide a contact point to which questions may be addressed. Lead applicants may submit questions in writing up to 21 days before the deadline for the submission of the concept notes/full applications.

In compliance with transparency and equal opportunities requirements, the answers provided to applicants on points that may be of interest to other applicants must be made available to all applicants. The way to achieve this is to publish on the website where the call was published, website of DG International Partnerships or Funding and/or F&T Portal (and other websites, where appropriate) a document containing all the questions and answers provided, there are no individual replies. This document must be updated regularly until 11 days before the deadline for submission of concept notes/full applications. In the interest of equal treatment of applicants, the contracting authority cannot give a prior opinion on the eligibility of an applicant, an affiliated entity, an action or specific activities.

If the contracting authority, either on its own initiative or in response to a request for clarification amends information in the call for proposals, a corrigendum with the changes must be published subject to the same publicity conditions as those for the call for proposals. The corrigendum may extend the deadline to allow applicants to take the changes into account.

6.5.5. Deadline for submission of the concept note and full application

The deadline for submission must be long enough to allow for high-quality proposals. Experience shows that a too short deadline may prevent potential applicants from submitting proposals or cause them to submit incomplete or ill-prepared proposals.

The minimum period for submission of concept notes is 45 days. For open calls, the minimum period between the date of publication of the guidelines for applicants and the deadline for submission of proposals is 90 days.

6.5.6. Submission of the concept note, full application and supporting documents

Concept notes and full applications [42] must be submitted in accordance with the instructions given in the guidelines for applicants (see template guidelines, Annex e3). The applicants must indicate the sources and amounts of European Union funding received or applied for the same action or part of the action or for its functioning during the same financial year as well as any other funding received or applied for the same action.

Lead applicants invited to submit a full application following a pre-selection of their concept note must submit the following documents [43] together with the full application form [44]:

• The statutes or articles of association of the lead applicant, of each co-applicant (if any) and of each affiliated entity (if any);

• The declaration on honour on exclusion criteria duly signed by the lead applicants, co-applicants and affiliated entities;

• Only in indirect management where the Partner Country makes the payments, a completed identification form (see Annex D).

In addition, for the purpose of the evaluation of the financial capacity, the following documents should be submitted:

• For action grants exceeding EUR 750 000 and for operating grants above EUR 100 000, the lead applicant must provide an audit report produced by an approved external auditor where it is available, and always in cases where a statutory audit is required by European Union or national law. That report must certify the accounts of the lead applicant for up to the last three available financial years. In all other cases, the lead applicant must provide a self-declaration signed by its authorised representative certifying the validity of its accounts for up to the last three available financial years [45];

• a copy of the lead applicant’s profit and loss account and the balance sheet for up to the last three financial years for which the accounts were closed).

Originals, photocopies or scanned versions of originals of the requested supporting documents (as laid down in the guidelines for applicants) must be provided showing legible stamps, signatures and dates of the said originals. If the supporting documents are not written in one of the official languages of the European Union or (if applicable) of the country of implementation of the action, a translation into the language/one of the languages of the call for proposals of the relevant excerpts of these documents showing proof of the applicants' eligibility must be submitted for the purposes of analysing he proposal. Where these documents are in an official language of the European Union other than the language(s) of the call for proposals, it is strongly recommended, in order to facilitate the evaluation, to provide a translation of the relevant parts of the documents, proving the lead applicant's and, where applicable, co-applicants' and affiliated entity(ies)' eligibility, into the language /one of the language(s) of the call for proposals.

Exceptions

• No statutes or articles of association shall be submitted for international organisations that have been pillar assessed or where the contracting authority has recognised the lead applicant’s, or the co-applicant(s)’s, or their affiliated entity(ies)’s eligibility for another call for proposals under the same budget line within 2 years before the deadline for receipt of applications. It shall submit instead a copy of the document proving their eligibility in a former call (e.g. a copy of the special conditions of a grant contract received during the reference period), unless a change in legal status has occurred in the meantime;

• If the applicants have already signed a contract with the contracting authority, instead of the legal entity form, the legal entity number may be provided, unless a change in legal status occurred in the meantime.

• No supporting documents for the evaluation of the financial capacity will have to be submitted for low value grants (not exceeding EUR 60 000) and the following categories of lead applicants: (i) natural persons in receipt of education support (ii) natural persons most in need, such as unemployed and refugees, and in receipt of direct support (iii) public bodies, including Member State organisations (iv) international organisations. No supporting documents for the evaluation of the financial capacity will be requested from co-applicant(s) or affiliated entities (if any). In addition, depending on its risk assessment, the contracting authority may waive the obligation to submit an audit report for secondary and higher education and training establishments.

• No declaration on honour on exclusion criteria shall be required in the case of an application for a very low value grant (not exceeding EUR 15 000).

6.5.7. The Evaluation Committee

6.5.7.1. Appointment and composition

See Section 2.9.

6.5.7.2. Use of assessors

Where the proposals received are particularly numerous or highly technical, it may not always be possible for the evaluation committee to examine each one in detail. If necessary, the assessment of all proposals or part thereof, may be carried out by assessors (external or internal) [46] so that the evaluation committee may conduct its deliberations on the basis of their assessments. Usually, the same assessors will be used for the different steps. Different assessors may be appointed for different lots [47].

Assessors work under the supervision of the chairperson of the evaluation committee. Assessors may attend the meetings of the evaluation committee as observers to present the results of their assessments and answer any questions from the evaluation committee members.

• For the administrative checks (including the eligibility of the action), the assessors check each proposal against the criteria listed in the checklist [48] and the declaration by the lead applicant (see the application form). Each proposal needs only to be checked by one assessor.

  External assessors may be recruited as required.

• For the evaluation of concept notes and full applications, assessors must use the published evaluation grids (see template evaluation grids) to give scores and provide comments.

• At least two assessors must assess each concept note and each full application, working independently of each other [49]. The two assessors should preferably be chosen from among European Commission staff. In case of scarcity of internal resources, external assessors may also be chosen. The external assessors must have an in-depth knowledge of the issues covered by the grant programme concerned. Their expertise should be checked against their CVs. A minimum of 5 years of experience of a particular issue should be requested.

6.5.7.3. EU Delegations as internal assessors for European Commission headquarters' calls for proposals

Where the call for proposals is organised by a service of the European Commission headquarters, one of the two assessors for the evaluation of the full application will be from the EU Delegation of the country where the action is to take place [50]. For regional actions, it is the lead EU Delegation or, as appropriate, Headquarters that will consult the European Union Delegations in the region concerned.

The assessor coming from the EU Delegation will be nominated in accordance with the applicable instructions on the nomination of evaluation committees by the relevant authorising officer. If assessors are not used, the EU Delegation should nevertheless be duly consulted. If an EU Delegation is not in a position to carry out the evaluation within the deadline, in order to avoid delays, its assessment can be taken over by a voting member from the evaluation committee or other internal or external assessor.

6.5.7.4. Absence of conflict of interest and confidentiality

See Section 2.9.2.

6.5.7.5. Responsibilities of the evaluation committee

See Section 2.9.3.

6.5.8. Stages in the evaluation process

The evaluation process starts with the receipt of the concept notes [51] by the contracting authority and ends with the decision to award grants to the selected applicants.

6.5.8.1. Receipt and registration of proposals

6.5.8.1.1. Submission by PROSPECT

Lead applicants must submit their proposals online via PROSPECT following the instructions given in the PROSPECT user manual.

Upon submission of the proposal, the lead applicants will receive an automatic confirmation of receipt in their PROSPECT profile.

6.5.8.1.2. Submission by other means

In indirect management, lead applicants must submit proposals by post, private courier service or by hand delivery.

When receiving proposals, the contracting authority must register them and provide a receipt for those delivered by hand (see Annex a7). The envelopes must remain sealed and be kept in a safe place until they are opened. The outer envelopes of proposals must be numbered in order of receipt (whether or not they are received before the deadline for submission of proposals).

Under direct management in the exceptional cases where for technical reasons is not possible to submit the documents through PROSPECT, lead applicants must submit proposals by post, private courier or by hand delivery. The service in charge of the call must ensure that all applications received are registered in PROSPECT following the opening session. Lead applicants who submitted online will receive an automatic acknowledgement of receipt. Applications received by post, private courier or hand deliveries (including any overdue applications) must be encoded on behalf of the applicants in the system and the original must be kept in the archives. Once an application is encoded, PROSPECT will generate an automatic acknowledgement of receipt to the email address of the organisation and of the contact person. In case of overdue applications, PROSPECT will generate the respective letter. In case the specific call does not allow the submission of proposals by post, private courier or hand deliveries, the applications received by these means will be rejected.

6.5.8.2. Opening session and administrative checks

Members of the evaluation committee and any observers, like assessors, must have signed their declarations of absence of conflict of interest and confidentiality, before they may have access to the applications.

6.5.8.2.1. Opening session

Under indirect management and direct management in cases where some applications are received on paper, all proposals received should be opened in an opening session (after expiry of the submission deadline) at which the registration details are checked and the proposals are numbered.

The secretary to the evaluation committee supervises the opening session and requests the assistance of other member of staff of the contracting authority if need be.

The register of proposals received should contain the following information:

• the registration number of the proposal;

• the date of submission;

• the lead applicant’s name and address.

For each proposal:

• the original is kept safely in the archives of the contracting authority;

• copies are distributed to the evaluators and, where applicable, to the assessors.

6.5.8.2.2. Administrative checks

Only those proposals that met the deadline are subject to an administrative check to assess whether the criteria mentioned in the checklist are fulfilled. Under no circumstances may assessors or members of the evaluation committee change the checklist.

Note that the administrative check also includes an assessment of the eligibility of the action. Administrative checks may be carried out by members of the evaluation committee (including the secretary) or by one or more assessors.

If any of the requested information is missing or is incorrect, the application may be rejected on that sole basis and the application will not be evaluated further. However, if due to a clerical error on the part of the applicants, the applicants fail to submit evidence or to give a statement, the evaluation committee may, except in duly justified cases, ask the lead applicant to provide, within a set deadline, the missing information or clarify supporting documents. Such information or clarifications may not substantially change the proposal or alter the terms of the call. Once received, the evaluation committee may use its discretion in deciding whether it should be accepted, while ensuring equal treatment of proposals and proportionality. Any decision taken by the evaluation committee must be fully recorded and the evaluation report(s) shall give reasons (see Section 2.9.3.).

The contracting authority must keep proposals not considered for further evaluation.

If the members of the evaluation committee do not carry out the check themselves, the evaluation committee must review the conclusions of the assessor(s) using the completed grids. To facilitate the evaluation committee’s review of the assessments, the secretary must ensure that one list is drawn up containing proposals that did not comply with the administrative checks. Reasons must be given for each entry on the list.

Following the opening session (where relevant), and the administrative checks, the evaluation committee meets to decide on any contentious case (including the eligibility of actions) and proceeds with the evaluation of the concept notes.

6.5.8.3. Evaluation of the concept note

Concept notes submitted within the deadline and that duly passed the administrative checks are then evaluated for the relevance and design of the action, using an evaluation grid (see Annex e5a [52]). The overall assessment is based on the scores obtained under each subheading, added up by heading. Note that it is also possible to comment and make observations per subheading. If the evaluation committee does not evaluate the concept notes itself, the final score is the arithmetical average of the scores given by the assessors. The completed evaluation grids for each concept note must be sent to the evaluation committee, if assessors are used.

Where the call for proposals is organised by a headquarters service of the European Commission and an European Union Delegation exceptionally participates as assessor in the evaluation of concept notes, each concept note is assessed by the European Union delegation in the country where the proposed action is to take place, for assessment on the basis of the same evaluation grid (see Annex e8). The completed evaluation grids for each full application must be sent to the evaluation committee.

The secretary then draws up a list of all the concept notes, ranked by score. As a first step, only the concept notes that receive a score of at least 30 points in the evaluation are considered for pre-selection. Concept notes that reach the above threshold will then be ranked by score. The highest scoring applications will be pre-selected until at least twice the available budget for the call for proposals is reached.

Following the evaluation of the concept notes, the contracting authority informs all lead applicants in writing of the results of the evaluation and whether or not they passed the opening (where applicable) and administrative checks and shall invite the shortlisted lead applicants to submit a full application [53]. Under direct management, this letter is generated and sent via PROSPECT. In case of hand deliveries or applications received by post, PROSPECT sends the letter to the email addresses encoded. Lead applicants who did not provide an email address will be informed by post.

6.5.8.4. Evaluation of the full applications

The opening session (indirect management and direct management in exceptional cases of paper submission) and administrative checks described above are also undertaken before the full application is evaluated [54].

The quality of the full application is assessed using the evaluation grid (see Annex e5b [55]) containing the selection and award criteria. Comments are made for each subheading on the basis of the questions and criteria used for that heading. In addition, there must always be a check of consistency between budget items and the description of the action. The overall assessment is based on the scores obtained under each subheading, added up by heading. If the evaluation committee does not evaluate the applications itself, the final score is the arithmetical average of the scores given by the assessors. For indirect management, the completed assessments for each proposal must be sent to the evaluation committee (for direct management they are available in PROSPECT).

Where the call for proposals is organised by a Headquarters service of the European Commission each full application will be allocated via PROSPECT to the European Union Delegation in the country where the proposed action is to take place, for an internal assessment on the basis of the same evaluation grid (see Annex e8) [56]. The completed evaluation grids for each full application must be sent to the evaluation committee.

Under direct management (members of) the evaluation committee or internal assessors evaluating the full applications may re-evaluate the scores given for the relevance at concept note stage and transferred to the full application. It is up to the evaluation committee to accept this new assessment or not.

Please note that the information assessed on the basis of the concept note may not be changed by the applicants in the full application except for the following: i) the contribution requested from the European Union for the action may not differ from the initial estimate by more than 20%. Should that requested contribution differ from the initial estimate, the difference between the European Union contribution and the total cost of the action must remain within the limits imposed by the guidelines for applicants; ii) the lead applicant may add, remove or replace one or more co-applicant(s) or affiliated entity (ies) only in duly justified cases; iii) the lead applicant may adjust the duration of the action if unforeseen circumstances outside the scope of the applicants have taken place following the submission of the concept note and require such adaptation (risk of action not being carried out). In such cases the duration must remain within the limits imposed by the guidelines for applicants. An explanation/justification of the relevant replacement/adjustment must be included in an accompanying letter or email [57].

The secretary then draws up a list of all the full applications, ranked by score. The highest scoring applications will be pre-selected until the available budget for this call for proposals is reached.

Under direct management, following the evaluation of the full applications, the contracting authority informs those lead applicants provisionally selected and those placed on the reserve list that they will be subject to the final eligibility check.

The notification letter is generated and sent via PROSPECT. In case of hand deliveries or applications received by post, PROSPECT sends the notification letter to the email addresses encoded. Lead applicants who did not provide an email address will be informed by post.

6.5.8.5. Final eligibility and supporting documents checks

This assessment is carried out using the declaration by the lead applicant, the required supporting documents and the criteria set out in the guidelines for applicants. Under no circumstances may assessors or members of the evaluation committee change the declaration.

• Is the declaration by the lead applicant in conformity with the supporting documents requested?

  Any missing supporting document or any inconsistency between the declaration and the supporting documents is sufficient to reject the proposal. However, the evaluation committee may use its discretion in deciding whether the concerned applicants should be allowed to submit missing documents or correct the relevant information, having regard to the principles of equal treatment and proportionality. Any decision taken by the evaluation committee must be fully recorded and the reasons leading to this decision must be explained in the evaluation report(s) (see Section 2.9.3.).

• Eligibility: are the applicants (and any affiliated entity(ies)) eligible (including exclusion criteria)?

  This is assessed according to the criteria set out in the guidelines for applicants.

The eligibility checks may be carried out by members of the evaluation committee or by assessors. Each proposal may be examined by one person only.

While the eligibility checks are usually carried out only for the provisionally selected applicants (including those on placed on the reserve list) at the end of the procedure, the evaluation committee may decide to check eligibility at any previous step in the procedure. In the interest of good administrative practice, the evaluation committee can check and then reject applicants at any stage of the evaluation if it is immediately obvious that the latter do not meet the eligibility criteria.

If the members of the evaluation committee do not carry out the assessment themselves, the evaluation committee must review the conclusions of the assessors using their completed grids. To facilitate the evaluation committee’s review of the assessments, the secretary must ensure that one list containing the ineligible proposals is drawn up. Reasons must be given for the ineligibility of each entry on the list.

Finally, the evaluation committee checks that none of the successful applicants, including co-applicants or affiliated entities, are in an exclusion situation in the early detection and exclusion system nor in the lists of European Union restrictive measures (see Sections 2.4. and 2.6.10.) and includes the checklists in the evaluation report (in indirect management this must be checked with the EU delegation).

6.5.8.6. The evaluation committee’s recommendations

The evaluation committee drafts its recommendations; in case assessors participate to the evaluation committee, such recommendations are drafted only after the assessors have examined all the applications. In this respect, the evaluation committee must not change the assessors’ scores or recommendations and must not alter the evaluation grids completed by the assessors.

The evaluation committee may decide to approve the ranking drawn up by the secretary on the basis of the assessors’ report. If the evaluation committee does not accept the scores awarded by the assessors to an application (where for instance there is a significant difference or clear discrepancies between the scores awarded by the assessors), it must give reasons for this decision in the evaluation report. The committee then has to fill in a new evaluation grid (either collectively or by one of the voting members of the committee) for the proposal concerned. Such a re-evaluation may not be entrusted to external assessors. A new list will be produced on the basis of the scores from the new evaluation, which replace those given by the assessors. The new evaluation may also cover only one or more parts of the evaluation (for example, where the evaluation committee decides to re-evaluate only the relevance of the actions).

All such decisions must be recorded and fully substantiated in the evaluation report. The evaluation grids completed by the members of the evaluation committee must be kept with those completed by the assessors.

The evaluation committee’s decisions are taken independently and in an advisory capacity. The evaluation committee must ultimately draw up a list of the applications selected for financing, indicating the score obtained by each application, the requested amount of the proposed grant and the proportion of the eligible costs proposed to be financed. The allocation of the final scores is a joint decision of the evaluation committee. However, the assessment of proposals may be split among the voting members. In this case, each concept note or full application must be assessed independently at least by two voting members [58]. The committee reserves the right to perform re-evaluations in duly substantiated cases. However, in the case of substantial discrepancies between the two assessments, the committee must re-evaluate the application concerned.

Subject to the following considerations, the list of the applications selected for financing is made up of the applications obtaining the best scores, ranked by order, within the limits of the funds available under the call for proposals.

• The evaluation committee may recommend the selection of an application under certain conditions that should be met prior to contract signature. Any such conditions, however, should not call into question the grant award decision or be contrary to the equal treatment of applicants (see Sections 6.3.6. and 2.5.2).

• The evaluation committee may decide not to allocate all the available funds if it finds that there are too few applications of the quality required to receive a grant. In other words, the mere availability of funds should not lead to the award of contracts for applications that do not reach the necessary level of quality.

• The evaluation committee may draw up a list by subject or geographical area according to the guidelines for applicants.

• The evaluation committee may reject an application if it has selected another that is of a similar nature but has been awarded a higher score.

• Where several applications submitted by the same lead applicant are selected for financing, but the lead applicant does not have the financial and operational capacity required to implement all the actions together, the committee may reject the applications that have been awarded a lower score, and select the applications that the lead applicant has the capacity to implement.

The evaluation committee may also draw up, in the same conditions, a ranked reserve list comprising a limited number of applications that obtained the best scores after those recommended for financing. This reserve list is valid for the period stated in the evaluation report. The applications included in that list are likely to receive a grant if funds become available under the call for proposals (if the eligible costs of the selected applications decrease, or it is impossible to sign a contract with the selected applicants, additional funds become available, etc.).

The final evaluation report, covering the eligibility checks, is drawn up following the final meeting of the evaluation committee. It must be signed by all members of the evaluation committee.

The evaluation committee may also decide not to recommend the award of any grant and thus cancel the procedure (see Section 6.5.9.).

Subject to the contracting authority’s legislation on access to documents, the entire procedure, from the drawing-up of the call for proposals to the selection of successful applicants, is confidential. The evaluation committee’s decisions are collective and its deliberations must remain secret. The evaluation committee members and assessors are bound to secrecy. If its law conflicts with the confidentiality required, the contracting authority must obtain prior authorisation from the European Commission before disclosing any information.

The evaluation report, in particular, is for official use only and may be divulged neither to applicants nor to any party outside the authorised services of the contracting authority, the European Commission and the supervisory authorities (e.g. the European Court of Auditors).

6.5.9. Cancelling the call for proposals

The contracting authority may decide not to award any grant, and thus to cancel the call for proposals procedure at any stage, but particularly in the light of the evaluation report, if:

• the call for proposals has been unsuccessful, i.e. no worthwhile proposal has been received or there were no applications;

• the economic or technical data of the programme have been fundamentally altered;

• exceptional circumstances or force majeure render the normal implementation of the planned actions impossible;

• there have been irregularities in the procedure, in particular where these have prevented equal treatment (see Section 2.5.8.).

In case of cancellation, applicants will not be entitled to compensation.

In case of cancellation, the contracting authority shall publish a cancellation notice (Annex e11b).

Under direct and indirect management when the call was published in PROSPECT, the contracting authority fills and uploads the cancellation notice in PROSPECT, so that the applicants can be automatically notified by the system.

In order to ensure broader publicity, the cancellation notice is also published through PROSPECT on the website where the call was published, website of DG International Partnerships or Funding and Tender opportunities website (F&T portal).

6.5.10. Award decision

See Section 2.10.1.

The award decision states the subject and overall amount of the decision, the approved evaluation report and, where appropriate, the grounds for the decision by the contracting authority to depart from the recommendations made by the evaluation committee in the report in respect of a particular application. The contracting authority shall sign the award decision (Annex e11a).

6.5.10.1. Notification to applicants

6.5.10.2. Publicising the award of grants

See Section 2.10.4.2.

6.5.10.3. Contract preparation and signature

In preparing grant contracts for each of the successful applicants, the contracting authority must follow the steps outlined in Sections 2.10.2 and 2.10.3.

If the call for proposals was organised by a headquarters service of the European Commission a copy of all the documentation and information from the evaluation needed to draft and manage the contract, are sent to the European Union delegation in the country where the proposed action is to take place.

The budget proposed for the action by the successful applicants at the call for proposals stage must be corrected to remove any obvious arithmetical errors or ineligible costs prior to signing the contract. The description of the action is corrected accordingly if need be.

The contracting authority may decide that other clarifications or  corrections may be made to the description of the action or to the budget in so far as they do not call into question the grant award decision, do not conflict with equal treatment of applicants, and:

• relate to matters clearly identified by the evaluation committee; or

• aim at taking into consideration changes that have occurred since the date of receipt of the proposal, or

• aim at removing all direct costs related to headquarters human resources, except for the costs incurred by such staff:

• when on mission at the place of execution of the action or

• when, due to the functional organisation of the action, there is no project office at the place of execution of the action, or

• when they concern tasks necessary to achieve the operational objectives of the action: such tasks must be planned as operational activities in the description of the action.

These amendments cannot lead to an increase in either the amount of the grant or the percentage of the European Union contribution as set in the guidelines of the call for proposals. In this respect, records of the contacts with the applicants must be kept on the file.

In no case the conditions announced in the guidelines can be altered at this stage. Apart from the above-mentioned clarifications and/or corrections, any other alteration of the initial proposal or deviation from the award conditions laid down in the guidelines is strictly prohibited.

Any other alteration to the successful applicant’s proposal, or negotiation, is prohibited.

In direct management, the signing of a grant contract with an applicant must take place within 3 months from the notification of the award decision. However, in exceptional circumstances, in particular in case of complex actions (such as multi-beneficiaries calls or, in case of calls with a large number of proposals) or where there have been delays attributable to the applicants, this rule should not be applied.

6.5.10.4. Use of reserve lists

Once all possible contracts have been signed with successful applicants, it may be the case that some funds remain available under the budget of the call for proposals. It may even be the case that additional funds are added while the reserve list is still valid.

In these cases, the procedure for signing additional contracts from the reserve list will be:

1. If the funds still available suffice to finance the requested European Union contribution from the first runner on the reserve list, the provisions above regarding the notification and contract preparation/signature are followed. In order to verify whether the funds are enough, the arithmetical errors and potential ineligible costs must have been taken into consideration as they may lead to a reduction of the budget.

2. If the funds available do not suffice, this same applicant will be offered the possibility to increase its co-financing in order to bridge the gap. If the applicant is able to do so (please note that, as a result of this exercise, the percentage of eligible costs must remain within the authorised co-financing rules set by the guidelines of the concerned call), the contract will be signed in line with the instructions in this chapter. In the case that no additional funds can be secured by the applicant, or in case that the new percentage of co-financing is not compliant with the guidelines for applicants, no contract will be signed and the second runner in the list will be contacted, and the same approach is followed (availability of funds to finance the action after correction of potential arithmetical errors or ineligible expenditure, possibility is given to increase their contribution if the remaining funds cannot cover the requested European Union financing, etc.).

   In case of proposals making use of both costs-based and financing not linked to costs budgets, since the co-financing rule is not mandatory, the applicant will be offered the possibility to increase its co-financing but the financing not linked to costs component of the proposal will remain unchanged.

   In case of proposals making use of full financing not linked to costs (no cost-based component), only the first ranked proposal will be offered the possibility to use the remaining funds and only if their contribution proposal is equal or less than the available funds. Therefore, if there is available budget to finance a proposal ranked lower in the reserve list while this budget is not sufficient to finance a proposal ranked higher in the reserve list, the lower ranked proposal cannot be financed.

If needed, the same will be done with the subsequent applicants on the reserve list (3^rd, 4^th, etc.).

Under no circumstances will applicants be requested to reduce or amend their actions (apart from the possible corrections and clarifications explained in this chapter) in order to make them fit the available European Union financing, since this would entail a negotiation and an alteration of the proposal.

This procedure may lead to situations where lower ranked proposals are finally awarded a grant instead of higher ranked ones. For the sake of transparency and equal treatment, it is important to keep a record of all communications with the applicants when following the above-described process.

6.5.11. Characteristics of the standard grant contract

Grants are subject to a written agreement (standard grant contract) concluded with the beneficiary [59].

If awarded the grant contract, the applicants will become the grant beneficiary(ies) and party(ies) to the grant contract. In particular, the lead applicant will become the beneficiary identified in Annex e3h1 (special conditions) as the coordinator.

1. The coordinator is the main interlocutor of the contracting authority. It represents and acts on behalf of any other beneficiary (if any) and coordinates the design and implementation of the action.

2. The costs eligible for financing are the costs incurred by the grant beneficiary (or beneficiaries in case of multi-beneficiary grants) or the amounts agreed for grants making use of financing not linked to costs. Costs incurred by affiliated entities to a beneficiary may also be accepted as eligible costs.

3. The standard grant contract recognises the beneficiary’s independence of action and lays down simplified management rules accordingly. In particular, it allows the coordinator to adapt or modify the action without the prior consent of the contracting authority provided that the modifications are not substantial (i.e. they do not put into question the conditions of award of the contract) and do not result in a change of more or less than 25% to any budget heading. Please note that for grant contracts making using of financing not to linked to costs, there are restrictions as regards transfers between headings.

4. In awarding any procurement contracts required for the purposes of the action, the beneficiary must comply with the rules set out in Annex IV to the contract.

5. Unless otherwise requested or agreed by the European Commission, the grant beneficiary must take the necessary measures to ensure the visibility of the Union financing or contribution (see Section 2.5.3.).

For grant contracts with a financing not linked to costs component it is important to note that:

1. Eligibility and financial verification of costs does not apply. In this case, the grant is paid against fulfilment of conditions or achievement of results measured by reference to previously set performance indicators.

2. The budget and the logframe should clearly identify the indicators and their related targets and values. The value assigned to each indicator must be calculated including the risk of changes in the market prices.

3. The grant contract will define the modalities for the assessment of the results claimed to be achieved by the beneficiary in the progress and final reports (like a third party assessment). If no third party assessment is required progress and final reports will form the evidence against which payments will be validated, hence it is expected that progress reports will include adequate description of the results achieved. Any relevant data sources that can enable validating the achievement of the results should be provided by the beneficiary.

6.6. Specific cases

6.6.1. Low value grants and very low value grants

Low value grants are those grants that are lower than or equal to EUR 60 000.

In this case, specific simplifications apply:

1. No supporting documents to demonstrate financial capacity are requested.

2. The pre-financing guarantee may not be asked.

3. Record keeping obligations (accounting records and supporting documents) is reduced to 3 years after the payment of the balance.

4. Obligation to inform the contracting authority of any change in their postal and electronic addresses is reduced to 3 years after the payment of the balance.

5. The no-profit rule does not apply.

6. The obligation to submit the SEA-H questionnaire does not apply.

Very low value grants are those grants that are lower or equal to EUR 15 000 the following additional simplifications apply:

1. No evaluation of the financial capacity shall be carried out [60].

2. No obligation to submit a declaration on honour on exclusion and selection criteria [61].

6.6.2. Operating grants

Operating grants finance the functioning of a body which has an objective forming part of, and supporting, a European Union policy.

Considering their nature, operating grants are always mono-beneficiary and each beneficiary may not get more than one operating grant for a given financial year. The duration of an operating grant may not exceed 12 months.

The contract for an operating grant must be awarded within 4 months from the start of the beneficiary’s financial year. Costs eligible for financing may not have been incurred before the grant application was submitted nor before the start of the beneficiary’s financial year, in compliance with the principle of non-retroactivity.

6.7. Modifying grant contracts

6.7.1. General principles

See Sections 2.11.1. and 2.11.3.

For more detailed information, see section 19.2.9. of the users’ guide on the implementation of the grant contracts in the INTPA Companion.

6.7.2. Preparing an addendum

See Section 2.11.4.

6.8. Award of contracts & financial support to third parties by grant beneficiaries

6.8.1. Award of contracts

Where implementation of the action requires the beneficiary(ies) and its affiliated entity(ies) (if any) to award procurement contracts, those contracts must be awarded in accordance with Annex IV to the standard grant contract. Should the grant beneficiary fail to comply with Annex IV, the related expenditures will not be eligible for European Union / EDF financing. Beneficiaries/affiliated entities may not award any procurement contract to other beneficiaries/affiliated entities, or other actors involved (recipients of financial support, associates).

In this context, a distinction should be made between awarding implementation contracts and subcontracting:

• Subcontracting: Subcontracting is the implementation, by a third party with which one or more beneficiaries have concluded a procurement contract, of specific tasks forming part of the action as described in annex to the grant contract (see also the general terms and conditions in the model grant contract). In such a case, part of the action are not implemented by the beneficiaries but by the subcontractors. The beneficiaries remain liable for the subcontracted tasks. Subcontracting cannot cover core tasks of the action.

• Implementation contracts: implementation contracts relate to the acquisition by beneficiaries of routine services and/or necessary goods and equipment as part of their project management; they do not cover any outsourcing of tasks forming part of the action that are described in the proposal, i.e. in the description of the action annexed to the grant contract.

Any procurement (subcontracting or not) must respect the rules specified in Annex IV of the grant contract.

6.8.2. Financial support to third parties by grant beneficiaries

If the action requires financial support to be given to third parties [62], it may be given on condition that:

• Before awarding the grant, the contracting authority has verified that the grant beneficiary offers appropriate guarantees as regards the recovery of amounts due to the European Commission. This is due to the fact that the grant beneficiaries remain financially responsible vis-à-vis the contracting authority for the correct use of the financial support.

• The following conditions for giving such support are strictly defined in the grant contract to avoid the exercise of discretion by the grant beneficiary. By default, the applicants will include this information in their applications:

1. The objectives and results to be obtained with the financial support.

2. The different types of activities eligible for financial support, on the basis of a fixed list.

   Where no specific activities are supported (e.g. unconditional cash transfers to refugees to support their living or to human right defenders to support their work in general) this must also be specified. In this case, the grant beneficiary does not have to demonstrate that the financial support has been used by the recipients of financial support for a specific purpose.

3. The types of persons or categories of persons that may receive financial support.

   The contracting authority has to include any restrictions on nationality in the guidelines for applicants.

4. The criteria for selecting these entities and giving the financial support.

   Where the contracting authority wants to ensure that the beneficiary complies with certain principles and/or procedures justified by the specifics of a call (e.g. where large amounts will be redistributed through calls for proposals), this should be set forth in the guidelines for applicants. For example, the guidelines could foresee that, when launching calls for proposals for the award of financial support, beneficiaries may use their own procedures provided these procedures comply with the principles of proportionality, sound financial management, equal treatment and non-discrimination, ensure transparency with adequate publication of calls for proposals and prevent conflict of interests throughout the entire award procedure.

5. The criteria for determining the exact amount of financial support for each third entity.

   Where the contracting authority wants to ensure that the financial support should be based e.g. on costs actually incurred or comply with the no-profit-principle this needs to be specified in the guidelines for applicants.

6. The maximum amount that may be given.

   The maximum amount of financial support that can be paid must not exceed EUR 60 000 per third party, except where achieving the objectives of the actions would otherwise be impossible or overly difficult. If the threshold of EUR 60 000 is exceeded, this needs to be registered as an event to be reported. In that case, no limits apply [63].

   Where the contracting authority wants to apply a total ceiling for the giving of financial support (i.e. the available envelope for the applicants in this regard), this needs to be specified in the guidelines for applicants.

   Applicants may also be invited in the guidelines for applicants to propose the necessary documents to be kept by third parties to demonstrate that the financial support has been used in accordance with the grant contract.

In the current context where grants of a large amount are encouraged to avoid the multiplication of small contracts, financial support to third parties can be an effective way to fund grass-roots organisations or local authorities, within the above described limits.

For the avoidance of doubt, rules on financial support apply only where a beneficiary provides this support to a third party. The criteria above do not need to be complied with when funds are provided to co-beneficiaries or affiliated entities.

6.9. Grants to organisations whose pillars have been positively assessed, (other) international organisations and national bodies

6.9.1. Grants to organisations whose pillars have been positively assessed by the European Commission

If the beneficiary of a grant (i.e. the coordinator in a multi-beneficiary contract) is an organisation whose pillars have been positively assessed by the European Commission, this organisation will not sign a grant contract but a contribution agreement based on the related template.

However, the template of the contribution agreement will need to take into consideration standard templates published with the call for proposals, i.e. the budget (Annex B) and the logical framework (Annex C) [64] which is to be included in the description of the action. The description of the action (Annex I to the contribution agreement) will be drawn from the application form submitted by the organisation [65].

Where the lead applicant is not a pillar assessed organisation but one or more co-applicant are international organisations whose pillars have been positively assessed, the standard grant contract will be signed. In this case, additional provisions of Annex e3h11 will be incorporated under Article 7 of the special conditions.

Please note that in case of direct award of a grant, it is possible to accept simplified cost options embedded in the cost accounting practices of the pillar assessed entity if this has been positively assessed by an independent external auditor (see Section 6.3.3.), in accordance with the methodology adopted by the European Commission and with its prior agreement.

6.9.2. Grants to other international organisations (non - pillar assessed)

An international organisation whose pillars have not been positively assessed by the European Commission will sign a standard grant contract in all cases. However, some provisions of Annex e3h11 (see Annex e3h11 for details) also need to be included in the special conditions.

As per Article 159 FR, ‘international organisation’ means an international public-sector organisation set up by international agreement, and specialised agencies set up by such organisations — these organisations may have a worldwide or regional scope. Entities created under national law are not international organisations (e.g. a national NGO with several regional or country offices).

Organisations such as the United Nations and its agencies and specialised entities, the World Bank, the Organisation for Economic Cooperation and Development, the Word Trade Organisation, the International Monetary Fund, the Organisation for Security and Cooperation in Europe, the European Bank for Reconstruction and Development and the International Organisation for Migration clearly fall under the definition of ‘international organisation’. In cases of doubt, to ascertain whether an organisation is covered by the definition, the nature of the organisation must be determined mainly on the basis of its legal founding documents (for instance, its statutes and/or the intergovernmental agreement setting it up).

While the European Commission may assimilate other non-profit organisations to international organisations, this is not relevant for grants. Thus, a non-profit organisation assimilated by the European Commission under Article 159(3) is not regarded as an international organisation under a grant award procedure.

6.9.3. Grants awarded to (other) national public bodies from Member States or third donor countries

Grants awarded to national public bodies from Member States or third donor countries whose pillars have not been positively assessed by the European Commission must follow the normal grant rules and procedures set out in this chapter and the standard grant contract will be signed. However, national public bodies may benefit from special rules applicable to public-sector bodies (for instance, being exempted from submitting a financial guarantee, or in some cases providing supporting evidence for financial capacity).

6.9.4. Grants to national public bodies from a partner country

Where a public body from a partner country successfully participates in a call for proposals, it will implement the action by way of a grant and the standard grant contract will be signed [66].

Where a public body from a partner country implements an action outside the scope of a call for proposals the applicable modality depends on the concrete action:

1. If the activities to be implemented by the public body with its own resources/staff are envisaged as a stand-alone project (i.e. not involving budget implementation tasks) the public body will sign the standard grant contract. In these cases, a direct award is always justified due to the monopoly situation of the beneficiary [67]. Such activities may also include the award of contracts but only to supplement the activities to be implemented by the staff of the public body.

2. It is possible to have grants that take the form of financing not linked to costs (partial or totally).

3. Where the financial contribution of the European Union aims at supporting the running costs of a ministry, such support will be provided by way of an operating grant. Again, the ministry may award contracts in line with the relevant provisions of the grant contract. The aforementioned support to a ministry must not be confused with support to the implementing structure of a project under a programme estimate. In the latter case, the European Union contribution supports the body in managing budget implementation tasks (not the running costs) and will be provided as part of the programme estimate under the financing agreement with the partner country(ies) [68].

4. If the activities to be implemented by the public body are part of a larger project or programme involving also budget implementation tasks the public body will implement the activities under a programme estimate [69].