Preparatory Action - Digital Transformation of European Industry

Deadline: Jan 31, 2018  
CALL EXPIRED

Introduction

The European Commission adopted on 28.04.2017 a financing decision for a preparatory action in the field of digital transformation of European industry.

 

This preparatory action promoted by the European Parliament, aims to develop a coherent, coordinated and sustainable approach to enhance the engagement of all relevant stakeholders interested in the digitisation of industry (business, academia, research organisations and civil society) and to inform, prepare and help them develop projects designed to face the new transformations.

The action covers those regions in Europe which have a large potential to benefit from industrial digital transformation and do not have a digitisation program or plan yet and those for which industry capacity needs to be improved. It targets the identification of the industrial competitive advantages and the potential for digital specialisation in regions at sector-level across all Member States.

It will be based on an inclusive and interactive bottom-up process in which participants from different environments (business, academia, policy etc.) will discover information about and generate strategies towards possible new activities. They will identify opportunities that emerge through this interaction, while policymakers assess outcomes and ways to facilitate the realisation of this potential. The action is planned to help establishing a framework for continuous collaboration between businesses and researchers in partnership with policy.

1.1. Background

The European Commission under the responsibility of the Commissioner for Digital Economy and Society launched on 19 April 2016 an initiative on digitising the European industry. The initiative aims at supporting European industry in its digital transformation.

Digital technologies are bringing a step change in the way companies design, produce, commercialise and create value from all types of goods and relevant services. Most of European high tech and large industries are fully aware of the importance of digital innovations. A clear illustration is the increasing digitisation of all types of products such as cars that become more connected and automated.

Digitisation is increasingly applied by high tech industries through a more intensive use of data analytics, complex simulation and modelling, robotics, photonics or 3D printing that is transforming production and business processes. This is also bringing major disruptions to business models as illustrated by the blurring of boundaries between products and services and the emergence of the sharing economy.

Digitisation is bringing us not only substantial gains in productivity and efficiency over the full cycle from product design to lifecycle management, but also a range of new products, processes and services that are safer, more comfortable, less resource consuming and more fit to our modern life. Digitisation of products and services could increase EU industry revenues by €110 billion per year by 2025.

When it comes to the uptake of digital innovations, Europe's high tech industry is amongst world leaders in integrating the technology into its products and processes. It is unfortunately not the case for the large majority of our industry and in particular not for SMEs and mid-caps and traditional sectors like construction or agro-food. Less than 2% of SMEs use advanced digital technologies to innovate in products or processes. A large disparity exists also between Member States and regions which is creating a new "digitisation divide" that may ultimately cripple all our economies.

This "digitisation divide" across companies of different sizes and across different industries is due to two aspects: first, smaller companies shy away from investments in new technologies if it is not clear whether these technologies turn out to be profitable. Second, they often lack the technical knowledge which is necessary to modify and implement their processes and develop new products based on new technologies.

To address both barriers, the Commission will invest €500 million in Digital Innovation Hubs (DIHs) so that every industry, large or small, high-tech or not, can understand the digital opportunities and get access to knowledge and testing facilities in the latest technologies.

 

The core of a DIH is a competence centre located in a technical university or research organisation. They will provide companies, in particular SMEs, with access to facilities for experimenting and testing digital innovations. Apart from this technological support, such hubs also supply innovation services such as advice on potential sources of financing for upscaling the experiment to real production and roll out. They can also support industry in training its staff and improve their digital skills, or in their efforts to enter new markets.

So a Digital Innovation Hub provides both technological support (through a competence centre) as well as more general innovation support.

This preparatory action will build on the concept of DIH and use them as a vehicle for collaboration of businesses, research entities and public authorities in order to reap the benefits of digitisation.

1.2. Main idea of the project

This action is to develop a coherent, coordinated and sustainable approach to support industry of all EU Member States at regional level using the concept of DIHs. The DIHs should stimulate the adoption of digital technologies such as Cyber-Physical-Systems (CPS), Internet of Things (IoT), digital design, simulation and analytics, photonics, advanced laser-based technologies, industrial robotics, 3D printing, etc. The DIHs should focus on those industrial sectors that are important for the region, and on SMEs in particular.  Through the help of the DIHs the companies in the region should be able to make their processes more efficient, to make higher quality and innovative products, but also to introduce and to switch to new business models. The DIH will form the governance structure and framework for continuous collaboration between businesses and researchers.

 

Objectives and tasks

1.3. Objectives and Approach

The preparatory action should support the preparation of at least 25 regional Digital Innovation Hubs across all Member States. The beneficiary will help to establish new DIHs or significantly scale up existing ones by mentoring activities, in particular by setting up a sector-specific business plan for the targeted competence centers to support digital transformation of industry.

To build on the strengths of a region, each regional DIH addressed should provide services which are in line with the priorities established for that region in the context of their Research and Innovation Strategy for Smart Specialisation  (RIS3).

The action is expected to build on:

• the networks of innovation hubs which have been established in the context of the Digitising European Industry.

• the catalogue of Digital Innovation Hubs.

• Digital Innovation Hubs for Smart Factories in new EU Member States, a similar action as this preparatory action, targeted to the EU13 countries

The action should also link to other ongoing initiatives such as the smart specialisation platform for Industrial Modernisation, the Vanguard and the Watify initiative.

A large part of the total financial resources of this action (up to 75%) should be devoted to support the development of activities of the regional DIH, including a mentoring and coaching programme.

A Steering Committee will be set up to supervise this initiative. It will be composed of five experts from government, academia, industry, associations etc.

The composition of the Steering Committee will be agreed with the Commission one month after the start of the grant agreement, based on a list of at least ten suitable candidates proposed by the beneficiary to be included in its proposal. Sufficient resources should be allocated by the beneficiary to cover reasonable fees to compensate them for their work. Relevant Commission services will be regularly informed of the progress of this initiative and its final results.

 

1.4. Tasks

The beneficiary should support the development of the establishment and scaling-up of at least 25 regional DIHs in at least 12 different EU member states in regions, which show so far limited activity in the uptake and adoption of digital technologies. Each targeted DIH should address at least three different sectors that are important for the region.

It is required that a number of regional DIHs (at least 5) is already being identified at the level of the proposal while for the remaining ones, the applicant will have to describe in its proposal the methodology that will be used to identify them in the regions.

The proposed methodology should follow an Expression of Interest (EoI) mechanism allowing interested stakeholders to express their willingness to participate in the initiative. The proposal should already contain the EoI text, evaluation criteria, ranking procedures, and foreseen dissemination actions to be able to engage stakeholders. The applicant should demonstrate strong links with local and sectorial entities respectively to support the dissemination of the EoI by organising at least 8 information events in different Member States.

For example the applicant may look at the mechanism used in earlier initiatives. Two previous mentoring programmes have already been carried out, or are still running. These are the I4MS mentoring programme and a training programme for organisations from EU13 countries. For an overview of already existing DIHs, and areas where there are less initiatives, see the catalogue of Digital Innovation Hubs.

The selection criteria (to be elaborated further by the applicant) that have to be used to identify the additional DIHs should include the following:

1. Is the DIH able to:

• Support the companies in the region or in the sector respectively with expertise about the digital technologies they need for their digital transformation (e.g. robotics, HPC cloud-based simulation, photonics, laser technologies, 3D printing, etc.)?

• Link to an existing ecosystem, such as chambers of commerce, regional development agencies, local banks, companies in the region, training providers for skills development, associations, etc.?

• Support the smart specialisation strategy of the region or digitisation strategies for sectors?

• Show that there is a critical mass of companies that can benefit from the DIH? Is there involvement and commitment from industry players along the value chain? Is there potential for creating new businesses and manufacturing jobs?

• Facilitate user-supplier partnerships across value-chains in the region or sector?

• Develop a business model for the sustainability of the DIH?

 

2. Does the region of the targeted DIH have a large potential to benefit from industrial digital transformation and does it not yet have a strong digitisation program or plan?

 

The beneficiary is expected to provide to the Steering Committee a list which should contain an adequate number of candidates (for instance, more than 50) for regional Digital Innovation Hubs. The Steering Committee will then select together with the Commission a number of DIHs that will bring the total DIHs supported by this initiative up to the foreseen number of DIHs (at least 25). Selection will be in accordance with the criteria above as well as the additional criteria proposed in the proposal and geographical coverage.

The beneficiary will help the selected Digital Innovation Hubs by carrying out the following activities in a period of at least 9 months:

1. Understand the type of services that the DIHs in the catalogue have developed to help SMEs and mid-caps with their digital transformation, and understand which ones would be useful for the companies in the DIH's region or sector;

2. Organise a kick-off workshop with all the selected DIHs to start a comprehensive mentoring and coaching activity:, see activity 3 and 4.

 

3. train the DIH in business development skills, developing a basic sector-specific approach to business models and business plans in order to identify local companies, manage a pipeline of opportunities, provide a professional service and to promote the regional Digital Innovation Hub model of continuous cooperation between business, academia, Research and Technology Organisations (RTOs) and government;

4. train the DIH in building a sustainable activity, which includes identification of regional and national funding opportunities with a special focus on the regional Research and Innovation Strategy for Smart Specialisation (RIS3) and the European Fund for Strategic Investment (EFSI), understanding costs and charging models and the value of a multi-funding and a balanced approach to financial management;

Activity 3 and 4 should be done through a training programme, consisting of at least one on-site session, complemented by webinars and other forms of training, such as manuals, tips and tricks on how to create an innovation network. The costs for the location and providing catering during the training session should be borne by the beneficiary;

5. Organise together with the regional DIH a 1 day workshop for engaging the regional ecosystem, and better understanding of their needs and possible barriers for their participation. The regional DIH will prepare the workshop (agenda, invitations, speakers, participants, etc.) and manage the discussion with the support of the contractor. Costs related to the following activities and items must be borne by beneficiaries:

o Cost of renting the location and providing catering during the workshop;

o Printing and distributing relevant information material for speakers and participants.

o Travel and subsistence costs of the speakers and participants does not need to be covered;

6. Develop together with the DIH a concrete action plan, including a business case, for the establishment of a DIH. This should be based on the needs of at least 3 SME companies in the region or sector and engage local policymakers to assess this outcome and find ways to facilitate the realisation of the potential;

7. Participate with the Hubs in at least one event organised by the European Commission for dissemination purposes, for instance the DEI Stakeholder forum.. The travel and subsitence costs of the DIHs needs to be covered by the beneficiaries.

 

The work of the beneficiaries may be divided into 4 workpackages:

 

WP 1: Project coordination and management

M1 Starting month

M18 Ending month

WP 2: Selection of at least 25 Digital Innovation Hubs

M1 Starting month

M7 Ending month

WP 3: Mentoring and coaching programme

M1 Starting month

M18 Ending month

WP 4: Development of business plans of the Digital Innovation Hubs

M7 Starting month

M18 Ending month

 

The beneficiary should also prepare a report for each selected DIH containing an analysis of the state-of-play in its region in various sectors, developing a compelling vision, a methodology and criteria for improving competitiveness of this region targeting various industrial sectors.  It will clearly target identification of industrial competitive advantages and the potential for smart specialisation at regional level broken down into sectors.

This report should provide concrete evidence, useful lessons and detailed recommendations (at sectorial, local, regional, national and EU level) regarding innovation and funding for further growing the network of Digital Innovation Hubs.

 

 

Methodology

Within the project a clear methodology covering all relevant aspects should be developed. Applicants are free to propose a specific methodology, taking into account the context and objectives of this project and the following conditions:

. Analyses generally should be based on data from a variety of sources such as from industry, government, trade journals and organisations, as well as market studies. It should build on existing analysis and sources of information, and include information from literature reviews and discussions or interviews with technology experts and key stakeholders in the field.

A reasonable number of reporting deliverables should be planned for a good monitoring of the progress and to capture the gained knowledge during the project.

Proposals should include a detailed work plan. The work plan should specify the management structure as well as the responsibility of each member of the team, including the main contractor and/or sub-contractor.

The work plan should include a list of tasks to be performed, with clear and realistic phases and milestones. Resources should be clearly associated to each task and they should be well balanced over the different tasks. Sufficient resources should be foreseen for the mentoring and coaching of the Digital Innovation Hubs.

 

 

Timetable

a) Publication of the call

1 December 2017

b) Deadline for submitting applications

31 January 2018 17:00 CET

c) Evaluation period

February/March 2018

d) Information to applicants

April 2018

e) Signature of grant agreement

May 2018

 

Budget available

The total budget earmarked for the co-financing of projects is estimated at EUR 1.494.000 (one million four hundred and ninety-four thousand euros).

The Commission expects to fund one proposal.

The Commission reserves the right not to distribute all the funds available.

 

Admissibility Requirements

 Applications must be sent no later than the deadline for submitting applications referred to in section 3.

 Applications must be submitted in writing (see section 14) and on usb key, using the application form available at https://ec.europa.eu/digital-single-market/news-redirect/607807

 Applications must be drafted in one of the EU official languages If the application is submitted in another language than English, please provide at least a summary of the action in English.

 Failure to comply with those requirements will lead to the rejection of the application. 

 

Eligibility Criteria

1.5. Eligible applicants

Only applications from legal entities established in the EU Member States or associated countries are eligible.

 

Applications may be submitted:

– by a single legal entity;

– by a consortium made up of several legal entities; or

– by one applicant, whether established specifically or not for the action, which is formed of several legal entities complying with the eligibility, non-exclusion and selection criteria set out in this call for proposals, and implementing together the proposed action, provided the application identifies the said entities. For the purpose of declaring eligible costs as specified under section 11.1, the entities composing the applicant shall be treated as affiliated entities.

 

In order to assess the applicants' eligibility, the following supporting documents are requested:

• private entity: extract from the official journal, copy of articles of association, extract of trade or association register, certificate of liability to VAT (if, as in certain countries, the trade register number and VAT number are identical, only one of these documents is required);

• public entity: copy of the resolution, decision or other official document establishing the public-law entity ;

• natural persons: photocopy of identity card and/or passport; certificate of liability to VAT,  if applicable (e.g. some self-employed persons)

• entities without legal personality: documents providing evidence that their representative(s) have the capacity to undertake legal obligations on their behalf.

 

Legal entities having a legal or capital link with applicants, which is neither limited to the action nor established for the sole purpose of its implementation, may take part in the action as affiliated entities, and may declare eligible costs as specified in section 11.1. For that purpose, applicants shall identify such affiliated entities in the application form.

1.6. Eligible activities

Types of activities eligible under this call for proposals:

 cooperation projects;

 conferences, seminars;

 training activities;

 awareness and dissemination actions;

 actions aiming at the creation and improvement of networks, exchanges of good practices, brokering and matchmaking;

 studies, analyses, mapping projects;

 innovation activities

 financial support to third parties (see point 11.8.d).

 

6.3 Implementation period

The maximum duration of the project is expected to be 18 months, other durations may be foreseen if clearly justified.

 

Exclusion Criteria

1.7. Exclusion

An applicant participating in call for proposals procedures shall be excluded where:

(a) the applicant is bankrupt, subject to insolvency or winding-up procedures, where its assets are being administered by a liquidator or by a court, where it is in an arrangement with creditors, where its business activities are suspended, or where it is in any analogous situation arising from a similar procedure provided for under national laws or regulations;

(b) it has been established by a final judgment or a final administrative decision that the applicant is in breach of its obligations relating to the payment of taxes or social security contributions in accordance with the law of the country in which it is established, with those of the country in which the authorising officer is located or those of the country of the performance of the contract;

(c) it has been established by a final judgment or a final administrative decision that the applicant is guilty of grave professional misconduct by having violated applicable laws or regulations or ethical standards of the profession to which the applicant belongs, or by having engaged in any wrongful conduct which has an impact on its professional credibility where such conduct denotes wrongful intent or gross negligence, including, in particular, any of the following:

(i) fraudulently or negligently misrepresenting information required for the verification of the absence of grounds for exclusion or the fulfilment of selection criteria or in the performance of a contract, a grant agreement or a grant decision;

(ii) entering into agreement with other applicants with the aim of distorting competition;

(iii) violating intellectual property rights;

(iv) attempting to influence the decision-making process of the Commission during the award procedure;

(v) attempting to obtain confidential information that may confer upon it undue advantages in the award procedure;

(d) it has been established by a final judgment that the applicant is guilty of any of the following:

(i) fraud, within the meaning of Article 1 of the Convention on the protection of the European Communities' financial interests, drawn up by the Council Act of 26 July 1995;

(ii) corruption, as defined in Article 3 of the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union, drawn up by the Council Act of 26 May 1997, and in Article 2(1) of Council Framework Decision 2003/568/JHA, as well as corruption as defined in the law of the country where the contracting authority is located, the country in which the applicant is established or the country of the performance of the contract;

(iii) participation in a criminal organisation, as defined in Article 2 of Council Framework Decision 2008/841/JHA;

(iv) money laundering or terrorist financing, as defined in Article 1 of Directive 2005/60/EC of the European Parliament and of the Council;

(v) terrorist-related offences or offences linked to terrorist activities, as defined in Articles 1 and 3 of Council Framework Decision 2002/475/JHA, respectively, or inciting, aiding, abetting or attempting to commit such offences, as referred to in Article 4 of that Decision;

(vi) child labour or other forms of trafficking in human beings as defined in Article 2 of Directive 2011/36/EU of the European Parliament and of the Council;

(e) the applicant has shown significant deficiencies in complying with main obligations in the performance of a contract, a grant agreement or a grant decision financed by the Union's budget, which has led to its early termination or to the application of liquidated damages or other contractual penalties, or which has been discovered following checks, audits or investigations by an authorising officer, OLAF or the Court of Auditors;

(f) it has been established by a final judgment or final administrative decision that the applicant has committed an irregularity within the meaning of Article 1(2) of Council Regulation (EC, Euratom) No 2988/95.

(g) for the situations of grave professional misconduct, fraud, corruption, other criminal offences, significant deficiencies in the performance of the contract or irregularity, the applicant is subject to:

(i) facts established in the context of audits or investigations carried out by the Court of Auditors, OLAF or internal audit, or any other check, audit or control performed under the responsibility of an authorising officer of an EU institution, of a European office or of an EU agency or body;

(ii) non-final administrative decisions which may include disciplinary measures taken by the competent supervisory body responsible for the verification of the application of standards of professional ethics;

(iii) decisions of the ECB, the EIB, the European Investment Fund or international organisations;

(iv) decisions of the Commission relating to the infringement of the Union's competition rules or of a national competent authority relating to the infringement of Union or national competition law.

(v) decisions of exclusion by an authorising officer of an EU institution, of a European office or of an EU agency or body.

 

1.8. Remedial measures

If an applicant declares one of the situations of exclusion listed above (see section 12.1), it should indicate the measures it has taken to remedy the exclusion situation, thus demonstrating its reliability. This may include e.g. technical, organisational and personnel measures to prevent further occurrence, compensation of damage or payment of fines. The relevant documentary evidence which illustrates the remedial measures taken must be provided in annex to the declaration. This does not apply for situations referred in point (d) of section 12.1.

 

1.9. Rejection from the call for proposals

A grant shall not be awarded to an applicant who:

a. is in an exclusion situation established in accordance with section 7.1;

 

b. has misrepresented the information required as a condition for participating in the procedure or has failed to supply that information;

 

c. was previously involved in the preparation of calls for proposal documents where this entails a distortion of competition that cannot be remedied otherwise.

 

The same exclusion criteria apply to affiliated entities.

 

Administrative and financial penalties may be imposed on applicants, or affiliated entities where applicable, who are guilty of misrepresentation.

1.10. Supporting documents

Applicants and affiliated entities must provide a declaration on their honour certifying that they are not in one of the situations referred to in articles 106(1) and 107 FR, by filling in the relevant form attached to the application form accompanying the call for proposals and available at: https://ec.europa.eu/digital-single-market/news-redirect/607807

This obligation may be fulfilled in one of the following ways:

 

a) for mono beneficiary grants

(i) the applicant signs a declaration in its name and on behalf of its affiliated entities

OR

(ii) the applicant and its affiliated entities sign each a separate declaration in their own name

b) for multi beneficiaries grants

(i) the coordinator of a consortium signs a declaration on behalf of all applicants and their affiliated entities OR

(ii) each applicant in the consortium signs a declaration in its name and on behalf its affiliated entities OR

(iii) each applicant in the consortium and the affiliated entities sign each a separate declaration in their own name

 

Selection criteria

1.11. Financial capacity

Applicants must have stable and sufficient sources of funding to maintain their activity throughout the duration of the grant and to participate in its funding. The applicants' financial capacity will be assessed on the basis of the following supporting documents to be submitted with the application:

a)

Low value grants (≤ EUR 60 000):



a declaration on their honour.



Grants ≥ EUR 60 000:



a declaration on their honour and

 

 

EITHER



the profit and loss account as well as the balance sheet for the last financial year for which the accounts were closed;



for newly created entities: the business plan might replace the above documents;

OR



the table provided for in the application form, filled in with the relevant statutory accounting figures, in order to calculate the ratios as detailed in the form.

b)

Grants for an action ≥ EUR 750 000:



the information and supporting documents mentioned above in point b) above and  



an audit report produced by an approved external auditor certifying the accounts for the last financial year available. 

In the event of an application grouping several applicants (consortium), the above thresholds apply to each applicant.



In the case of legal entities forming one applicant (the "sole applicant"), as specified in section 6.1, the above requirements apply to each one of those entities.

 

On the basis of the documents submitted, if the Responsible Authorising Officer (RAO) considers that financial capacity is weak, s/he may:



request further information;



decide not to give pre-financing;



decide to give pre-financing paid in instalments;



decide to give pre-financing covered by a bank guarantee (see section 11.6 below);



where applicable, require the joint and several financial liability of all the co-beneficiaries.

If the Responsible Authorising Officer (RAO) considers that the financial capacity is insufficient s/he will reject the application.

 

1.12. Operational capacity

Applicants must have the professional competencies as well as appropriate qualifications necessary to complete the proposed action. In this respect, applicants have to submit a declaration on their honour, and the following supporting documents:



curriculum vitae or description of the profile of the people primarily responsible for managing and implementing the operation (accompanied where appropriate, like in the field of research and education, by a list of relevant publications);



the organisation's activity reports;



an exhaustive lists of previous projects and activities performed and connected to the policy field of a given call or to the actions to be carried out;



an inventory of natural or economic resources involved in the project.

In the case of legal entities forming one applicant (the "sole" applicant), as specified in section 6.1, the above requirements apply to each one of those entities.

 

Award criteria

The proposals will be qualitatively assessed on the basis of the technical award criteria and respective scores listed below. The maximum total quality score is 100 points.

 

Award criterion

1. Excellence

1.1 clarity and pertinence of the objectives

1.2 soundness of the concept

1.3 credibility of the proposed methodology, competences and appropriate tools

1.4 capability to identify appropriate DIHs

1.5 quality of the proposed coordination and support measures

(All the sub-criteria above are of equal relative importance)

35/1 Maximum score/weighting

17,5 Threshold

2. Impact

2.1 Capacity to train 25 DIHs (regional and at least 3 sectorial DIHs)

2.2 Coverage of regions and sectors and distribution of activities across Europe

2.3 Quality of the description and analysis of DIHs in the proposal (at least 5)

(All the sub-criteria above are of equal relative importance)

45/1 Maximum score/weighting

22,5 Threshold

3. Organisation of work

3.1 coherence and effectiveness of the work plan, including appropriateness of the allocation of tasks and resources

3.2 appropriateness of the management structure and procedures, including risk and innovation management.

(All the sub-criteria above are of equal relative importance)

20/1 Maximum score/weighting

10 Threshold

 

Total

100 Maximum score/weighting

60 Threshold

 

Minimum score per criterion (threshold):

Proposals scoring less than 50% of the maximum score for any technical award criterion will be considered of insufficient quality and rejected.

Minimum total score (threshold):

Proposals with a total score of less than 60 points at the end of the evaluation process will be considered of insufficient quality and rejected.

 

Legal commitments

In the event of a grant awarded by the Commission, a grant agreement, drawn up in euro and detailing the conditions and level of funding, will be sent to the applicant, as well as the information on the procedure to formalise the agreement of the parties.

The 2 copies of the original agreement must be signed first by the beneficiary and returned to the Commission immediately. The Commission will sign it last.

 

Financial provisions

1.13. Eligible costs

Eligible costs shall meet all the following criteria:



they are incurred by the beneficiary.  



they are incurred during the duration of the action, with the exception of costs relating to final reports and audit certificates;

o

The period of eligibility of costs will start as specified in the grant agreement.

o

If a beneficiary can demonstrate the need to start the action before the agreement is signed, the costs eligibility period may start before that signature. Under no circumstances can the eligibility period start before the date of submission of the grant application.



they are indicated in the estimated budget;



they are necessary for the implementation of the action which is the subject of the grant;



they are identifiable and verifiable, in particular being recorded in the accounting records of the beneficiary and determined according to the applicable accounting standards of the country where the beneficiary is established and according to the usual cost accounting practices of the beneficiary;



they comply with the requirements of applicable tax and social legislation;



they are reasonable, justified, and comply with the requirements of sound financial management, in particular regarding economy and efficiency.

The beneficiary's internal accounting and auditing procedures must permit direct reconciliation of the costs and revenue declared in respect of the action/project with the corresponding accounting statements and supporting documents.

The same criteria apply to costs incurred by the affiliated entities.

Eligible costs may be direct or indirect.

 

1.13.1. Eligible direct costs

The eligible direct costs for the action are those costs which:

with due regard for the conditions of eligibility set out above, are identifiable as specific costs directly linked to the performance of the action and which can therefore be booked to it directly, such as :

(a) the costs of personnel working under an employment contract with the beneficiary or an equivalent appointing act and assigned to the action, provided that these costs are in line with the beneficiary’s usual policy on remuneration.

Those costs include actual salaries plus social security contributions and other statutory costs included in the remuneration. They may also comprise additional remunerations, including payments on the basis of supplementary contracts regardless of the nature of those contracts, provided that they are paid in a consistent manner whenever the same kind of work or expertise is required, independently from the source of funding used;

The costs of natural persons working under a contract with the beneficiary other than an employment contract or who are seconded to the beneficiary by a third party against payment may also be included under such personnel costs, provided that the following conditions are fulfilled:

(i) the person works under conditions similar to those of an employee (in particular regarding the way the work is organised, the tasks that are performed and the premises where they are performed);

(ii) the result of the work belongs to the beneficiary (unless exceptionally agreed otherwise); and

(iii) the costs are not significantly different from the costs of staff performing similar tasks under an employment contract with the beneficiary; 

The recommended methods for calculation of direct personnel costs are provided in Appendix.

(b) costs of travel and related subsistence allowances, provided that these costs are in line with the beneficiary’s usual practices on travel;

(c) the depreciation costs of equipment or other assets (new or second-hand) as recorded in the beneficiary’s accounting statements, provided that the asset:

(i) is written off in accordance with the international accounting standards and the beneficiary’s usual accounting practices; and

(ii) has been purchased in accordance with the rules on implementation contracts laid down in the grant agreement, if the purchase occurred within the implementation period;

The costs of renting or leasing equipment or other assets are also eligible, provided that these costs do not exceed the depreciation costs of similar equipment or assets and are exclusive of any finance fee;

Only the portion of the equipment’s depreciation, rental or lease costs corresponding to the implementation period and the rate of actual use for the purposes of the action may be taken into account when determining the eligible costs. By way of exception, the full cost of purchase of equipment may be eligible under the Special Conditions, if this is justified by the nature of the action and the context of the use of the equipment or assets;

(d) costs of consumables and supplies, provided that they:

(i) are purchased in accordance with the rules on implementation contracts laid down in the grant agreement; and

(ii) are directly assigned to the action;

(e) costs arising directly from requirements imposed by the Agreement (dissemination of information, specific evaluation of the action, audits, translations, reproduction), including the costs of requested financial guarantees, provided that the corresponding services are purchased in accordance with the rules on implementation contracts laid down in the grant agreement;

(f) costs entailed by subcontracts, provided that specific conditions on subcontracting as laid down in the grant agreement are met;

(g) costs of financial support to third parties, provided that the conditions laid down in the grant agreement are met;

(h) duties, taxes and charges paid by the beneficiary, notably value added tax (VAT), provided that they are included in eligible direct costs, and unless specified otherwise in the grant agreement.

 

1.13.2. Eligible indirect costs (overheads)

Indirect costs are costs that are not directly linked to the action implementation and therefore cannot be attributed directly to it.

A flat-rate amount of 7% of the total eligible direct costs of the action, is eligible as indirect costs, representing the beneficiary's general administrative costs which can be regarded as chargeable to the action/project.

Indirect costs may not include costs entered under another budget heading.

Applicants’ attention is drawn to the fact that if they are receiving an operating grant financed by the EU or Euratom budget, they may not declare indirect costs for the period(s) covered by the operating grant, unless they can demonstrate that the operating grant does not cover any costs of the action.

In order to demonstrate this, in principle, the beneficiary should: 

a.

use analytical cost accounting that allows to separate all costs (including overheads) attributable to the operating grant and the action grant. For that purpose the beneficiary should use reliable accounting codes and allocation keys ensuring that the allocation of the costs is done in a fair, objective and realistic way.  

b.

record separately:



all costs incurred for the operating grants (i.e. personnel, general running costs and other operating costs linked to the part of its usual annual activities), and



all costs incurred for the action grants (including the actual indirect costs linked to the action)

If the operating grant covers the entire usual annual activity and budget of the beneficiary, the latter is not entitled to receive any indirect costs under the action grant.

 

1.14. Ineligible costs

a)

return on capital and dividends paid by a beneficiary;

b)

debt and debt service charges;

c)

provisions for losses or debts;

d)

interest owed;

e)

doubtful debts;

f)

exchange losses;

g)

costs of transfers from the Commission charged by the bank of a beneficiary;

h)

costs declared by the beneficiary under another action receiving a grant financed from the Union budget. Such grants include grants awarded by a Member State and financed from the Union budget and grants awarded by bodies other than the Commission for the purpose of implementing the Union budget. In particular, beneficiaries receiving an operating grant financed by the EU or Euratom budget cannot declare indirect costs for the period(s) covered by the operating grant, unless they can demonstrate that the operating grant does not cover any costs of the action.

i)

contributions in kind from third parties;

j)

excessive or reckless expenditure;

k)

deductible VAT.

 

1.15. Form of the grant

11.3.1 Reimbursement of costs actually incurred

The grant will be defined by applying a maximum co-financing rate of 90 % to the eligible costs actually incurred and declared by the beneficiary and its affiliated entities.

 

1.16. Balanced budget

The estimated budget of the action must be attached to the application form. It must have revenue and expenditure in balance.

The budget must be drawn up in euros.

Applicants for whom costs will not be incurred in euros should use the exchange rate published on the Infor-euro website available at: http://ec.europa.eu/budget/contracts_grants/info_contracts/inforeuro/inforeuro_en.cfm]

The applicant must ensure that the resources which are necessary to carry out the action are not be entirely provided by the EU grant.

Co-financing of the action may take the form of:



the beneficiary's own resources,



income generated by the action or work programme,



financial contributions from third parties.

 

1.17. Calculation of the final grant amount

The final amount of the grant is calculated by the Commission at the time of the payment of the balance. The calculation involves the following steps:

 

Step 1 — Application of the reimbursement rate to the eligible costs

The amount under step 1 is obtained by application of the reimbursement rate specified in section 11.3.1 to the eligible costs accepted by the Commission,

Step 2 — Limit to the maximum amount of the grant

The total amount paid to the beneficiaries by the Commission may in no circumstances exceed the maximum amount of the grant as indicated in the grant agreement. If the amount obtained following Step 1 is higher than this maximum amount, the final amount of the grant is limited to the latter.

 

Step 3 — Reduction due to the no-profit rule

‘Profit’ means the surplus of the amount obtained following Steps 1 and 2 plus the total receipts of the action, over the total eligible costs of the action.

The total eligible costs of the action are the consolidated total eligible costs approved by the Commission. The total receipts of the action are the consolidated total receipts established, generated or confirmed on the date on which the request for payment of the balance is drawn up by the beneficiary.

The following are considered receipts:

(a)

income generated by the action;

(b)

financial contributions given by third parties to a beneficiary or to an affiliated entity, if they are specifically assigned by the third parties to the financing of the eligible costs of the action reimbursed by the Commission.

The following are not considered receipts:

(a)

financial contributions by third parties, if they may be used to cover costs other than the eligible costs under the grant agreement;

(b)

financial contributions by third parties with no obligation to repay any amount unused at the end of the implementation period.

If there is a profit, it will be deducted in proportion to the final rate of reimbursement of the actual eligible costs of the action approved by the Commission.]

 

Step 4 — Reduction due to improper implementation or breach of other obligations.

The Commission may reduce the maximum amount of the grant if the action has not been implemented properly (i.e. if it has not been implemented or has been implemented poorly, partially or late), or if another obligation under the Agreement has been breached.

The amount of the reduction will be proportionate to the degree to which the action has been implemented improperly or to the seriousness of the breach.

 

 

 

 

 

 

 

 

 

 

 

1.18.

Reporting and payment arrangements

1.1.1.

The beneficiary may request the following payments provided that the conditions of the grant agreement are fulfilled (e.g. payment deadlines, ceilings, etc.). The payment requests shall be accompanied by the documents provided below and detailed in the grant agreement:

Payment request

Accompanying documents

A pre-financing payment corresponding to 50% of the grant amount

(a)

bank guarantee (see section 11.6.2)

One interim payment.

For the purpose of determining the amount due as interim payment, the reimbursement rate to be applied to the eligible costs approved by the Commission shall be 90%

The total amount of pre-financing and interim payments shall not exceed 90% of the maximum grant amount

(a)

interim report on the outcome of the Expression of Interest and selection of DIHs

(b)

interim financial statement

(c)

a certificate on the financial statements and underlying accounts

Payment of the balance

The Commission will establish the amount of this payment on the basis of the calculation of the final grant amount (see section 11.5 above). If the total of earlier payments is higher than the final grant amount, the beneficiary will be required to reimburse the amount paid in excess by the Commission through a recovery order.

 

(a)

final technical report;

(b)

final financial statement;

(c)

summary financial statement aggregating the financial statements already submitted previously and indicating the receipts

(d)

a certificate on the financial statements and underlying accounts

In case of a weak financial capacity section 8.1 above applies. 

1.18.1.

Pre-financing guarantee

A pre-financing guarantee for up to the same amount as the pre-financing may be requested in order to limit the financial risks linked to the pre-financing payment.

The financial guarantee, in euro, shall be provided by an approved bank or financial institution established in one of the EU Member States. When the beneficiary is established in a third country, the Commission may agree that a bank or financial institution established in that third country may provide the guarantee if it considers that the bank or financial institution offers equivalent security and characteristics as those offered by a bank or financial institution established in a Member State. Amounts blocked in bank accounts shall not be accepted as financial guarantees.

The guarantee may be replaced by:



a joint and several guarantee by a third party or,



a joint guarantee of the beneficiaries of an action who are parties to the same grant agreement.

The guarantee shall be released as the pre-financing is gradually cleared against interim payments or the payment of the balance, in accordance with the conditions laid down in the grant agreement.

 

1.19.

Other financial conditions

 

a)

Non-cumulative award

An action may only receive one grant from the EU budget.

In no circumstances shall the same costs be financed twice by the Union budget. To ensure this, applicants shall indicate in the grant application the sources and amounts of Union funding received or applied for the same action or part of the action or for its (the applicant's) functioning during the same financial year as well as any other funding received or applied for the same action.

b)

Non-retroactivity

No grant may be awarded retrospectively for actions already completed.

A grant may be awarded for an action which has already begun only where the applicant can demonstrate in the grant application the need to start the action before the grant agreement is signed.

In such cases, costs eligible for financing may not have been incurred prior to the date of submission of the grant application.

c)

Implementation contracts/subcontracting

Where the implementation of the action requires the award of procurement contracts (implementation contracts), the beneficiary must award the contract to the bid offering best value for money or the lowest price (as appropriate), avoiding conflicts of interests.

The beneficiary is expected to clearly document the tendering procedure and retain the documentation for the event of an audit.

Entities acting in their capacity of contracting authorities in the meaning of Directive 2014/24/EU or contracting entities in the meaning of Directive 2014/25/EU must comply with the applicable national public procurement rules]

Beneficiaries may subcontract tasks forming part of the action. If they do so, they must ensure that, in addition to the above-mentioned conditions of best value for money and absence of conflicts of interests, the following conditions are also complied with:

a)

subcontracting does not cover core tasks of the action;

b)

recourse to subcontracting is justified because of the nature of the action and what is necessary for its implementation;

c)

the estimated costs of the subcontracting are clearly identifiable in the estimated budget;

d)

any recourse to subcontracting, if not provided for in description of the action, is communicated by the beneficiary and approved by the Commission. The Commission may grant approval:

(i)

before any recourse to subcontracting, if the beneficiaries requests an amendment

(ii) after recourse to subcontracting if the subcontracting:

 is specifically justified in the interim or final technical report and

 does not entail changes to the grant agreement which would call into question the decision awarding the grant or be contrary to the equal treatment of applicants;

e) the beneficiaries ensure that certain conditions applicable to beneficiaries, enumerated in the grant agreement (e.g. visibility, confidentiality, etc.), are also applicable to the subcontractors.

 

d) Financial support to third parties

The applications may not envisage provision of financial support to third parties.

 

Publicity

1.20. By the beneficiaries

Beneficiaries must clearly acknowledge the European Union’s contribution in all publications or in conjunction with activities for which the grant is used.

In this respect, beneficiaries are required to give prominence to the name and emblem of the European Commission on all their publications, posters, programmes and other products realised under the co-financed project.

1.21. By the Commission

With the exception of scholarships paid to natural persons and other direct support paid to natural persons in most need, all information relating to grants awarded in the course of a financial year shall be published on an internet site of the European Union institutions no later than the 30 June of the year following the financial year in which the grants were awarded.

The Commission will publish the following information:

 name of the beneficiary;

 address of the beneficiary when the latter is a legal person, region when the beneficiary is a natural person, as defined on NUTS 2 level if he/she is domiciled within EU or equivalent if domiciled outside EU;

 subject of the grant;

 amount awarded.

Upon a reasoned and duly substantiated request by the beneficiary, the publication shall be waived if such disclosure risks threatening the rights and freedoms of individuals concerned as protected by the Charter of Fundamental Rights of the European Union or harm the commercial interests of the beneficiaries.

 

PROCESSING OF PERSONAL DATA

The reply to any call for proposals involves the recording and processing of personal data (such as name, address and CV). Such data will be processed pursuant to Regulation (EC) No 45/2001 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data. Unless indicated otherwise, the questions and any personal data requested that are required to evaluate the application in accordance with the call for proposal will be processed solely for that purpose by [entity acting as data controller].

Personal data may be registered in the Early Detection and Exclusion System by the Commission, should the beneficiary be in one of the situations mentioned in Article 106(1) and 107 of the Financial Regulation 966/2012 (for more information see the Privacy Statement on:

http://ec.europa.eu/budget/library/explained/management/protecting/privacy_statement_edes_en.pdf).

 

 

PROCEDURE FOR THE SUBMISSION OF PROPOSALS

 

Proposals must be submitted by the deadline set out under section 3.

No modification to the application is allowed once the deadline for submission has elapsed. However, if there is a need to clarify certain aspects or to correct clerical mistakes, the Commission may contact the applicant during the evaluation process.

Applicants will be informed in writing about the results of the selection process.

 

Submission on paper

Application forms are available at https://ec.europa.eu/digital-single-market/news-redirect/607807 Applications must be submitted in the correct form, duly completed and dated. They must be submitted in four copies (one original clearly identified as such, plus three copies) and signed by the person authorised to enter into legally binding commitments on behalf of the applicant organisation.

Where applicable, all additional information considered necessary by the applicant can be included on separate sheets.

 

Please include the following marking on the envelope: "DIG TRANS"

Applications must be sent to the following postal address:

 by registered post, date as postmark or by courier service, date of receipt by the courier service;

European Commission

Directorate-General for Communications Networks, Content and Technology

Directorate Digital Industry (unit Photonics – A.4)

For the attention of the Head of Unit

1049 Brussels, Belgium

 

 or, by hand delivery by 17.00 on 31/01/2018 at the latest to the following address:

European Commission

Directorate-General for Communications Networks, Content and Technology
Directorate Digital Industry (unit Photonics – A.4)

For the attention of Head of Unit
Avenue du Bourget 1 B –1140 Brussels (Evere), Belgium

 

In this case, a receipt must be obtained as proof of submission, signed and dated by the official in the Commission's central mail department who took delivery.

 The department is open from 08.00 to 17.00 Monday to Thursday, and from 8.00 to 16.00 on Fridays. It is closed on Saturdays, Sundays and Commission holidays. Please note that in this case it is the date and time of reception at the Commission services that will count, not the actual date on which it was dispatched.

Applications sent by fax or e-mail will not be accepted.

 

 

Contacts

For any questions please contact:
CNECT-PHOTONICS-EVALUATIONS@EC.EUROPA.EU

 

 

Annexes:

 Application form (including checklist for applicants)

 Model grant agreement

 Model budget

 Declaration on Honour

Public link:   Only for registered users