Technology Stimulation Measures for Small and Medium-sized Enterprises

Contract negotiations with the European Commission

6.1 Summary
The standard CRAFT Contract states the conditions for the Commission's support, e.g. its financial contribution, the duration of the project, participating partners, etc. The Project Programme is treated in Annex I and the General Conditions in Annex II. Several steps are taken before a contract is signed. When a project is recommended for funding, staff at the Commission will contact the Project Co-ordinator and ask for a draft Project Programme and additional data on each partner, banking details, hourly rates, etc. If necessary, a meeting will also be arranged with the Commission in Brussels. The SME Co-ordinator signs the contract on behalf of all the participants.

6.2 CRAFT Contract

The Commission uses a standard model contract for CRAFT to lay down the terms and conditions for Commission support. Most of the contents in the contract are non-negotiable. It is a standard contract that has been harmonised by the Commission for CRAFT Projects. The CRAFT contract is composed of a number of clauses covering specific conditions for the project, e.g. financial contribution to the project by the Commission, how and when payment will be made, the duration of the project, participating partners, etc.

Annex I: Project Programme

The contract also includes annexes. One of these deals with the Project Programme and presents the scientific and technical details of the project. The text of the Project Programme is often the same as that of the project proposal, with some modifications.

Annex II: General conditions

Another annex is entitled General Conditions and describes the definitions used in more detail, the management of the project, the termination of the contract, ownership and patents, confidentiality, financial management, etc.

6.3 Steps to be taken between submission of proposal and Start of Project

Acknowledgement of Receipt

The first response from the Commission after submission of a project proposal is an Acknowledgement of Receipt. This receipt only confirms that the Commission has received the CRAFT Project proposal.

Evaluation Summary Report

The Project Co-ordinator will receive a letter from the Commission with information whether the project has been recommended for financial support or not. Attached to this letter is an Evaluation Summary Report with ratings, remarks and recommendations for the project proposal. If the project has been recommended for funding, the letter will state that a person at the Commission will contact the Project o-ordinator to start the contract negotiations.

Contract negotiations and submission of additional information

When the Commission official by contacts the Project Co-ordinator, it is to ask for additional data needed to draw up the contract for the project. The additional data required is often:

  • a draft of the Project Programme, i.e. the work plan. This is the same text as in the project proposal but amended in accordance with the remarks and recommendations in the Evaluation Summary Report.

  • "Annex with further explanation concerning cost categories". This form has to be filled in by all the partners in the project.

  • "Contract Management Information Form". This form has to be filled in by the Co-ordinator and informs the Commission to which bank account its funding should be credited.

  • "Information on hourly rate/overhead costs accounting principles". This form sometimes has to be filled in by the RTD Performers of the project.

  • Financial information on the participating companies, such as balance sheets

  • Description of partners' organisation structures.

  • Small companies often have to provide a bank guarantee to prove their financial capacity.

If necessary, the Commission official will also ask for a meeting in Brussels with the SME Co-ordinator . This is a good opportunity to discuss and clarify the project and its contractual issues.

Signature of the contract

The SME Co-ordinator signs the contract with the Commission. In order for him to sign on behalf of the other partners in the project, a Letter of Delegation is signed. You will find an example of a Letter of Delegation at the end of this section.

Start of project

The start of the project is normally the first day of the month following the signing of the CRAFT Contract by the Commission.

Avoid delays

The Project Co-ordinator should ensure that all the groundwork is completed, so that contract negotiations can be carried out as smoothly as possible. Most delays in contract negotiations stem from delays in communication between project participants or because project arrangements have not been fully worked out in advance. Consequently, partners in a CRAFT Project are strongly advised to agree on the details of the partnership at the time of preparing the project proposal.