MEGAFRAME Management, Notes on Subcontracting, CB 5/6/2008, v2
1) General Points on subcontracting within FP6 EC projects:
What other conditions does the contractor have to meet when subcontracting?
The contractor remains responsible for all its rights and obligations under the EC contract,
also for the tasks carried out by a subcontractor.
 The contractor must ensure that the intellectual property that may be generated by
a subcontractor reverts to the contractor so that it can meet its obligations under
the EC contract.
 In addition, the EC contract requires that the contractor impose a certain number
of conditions in its subcontract with the subcontractor, these include aspects
relating to audits by the Commission (EC) and the Court of Auditors (CoA) etc.
(include provisions indicating that the EC and CoA or their representatives may
carry out financial audits or controls on any subcontractor).
What rights and obligations does a subcontractor have?
A subcontractor is paid in full for its contribution made to a project by the contractor with
whom it has a subcontract. The work that a subcontractor carries out under the project
belongs to the contractor in the EC contract. A subcontractor has no rights or obligations visà-vis the Commission or the other contractors to the EC contract as it is a third party.
However, as mentioned above, the contractor must ensure that the subcontractor can be
audited by the Commission or the Court of Auditors.
2) Detailed list of rules on subcontracting:
See Guidelines on Financial Issues, Par. 2.2.1.1. [There are other conditions, i.e. additional
to the ones at point 1. above, which have to be extended to subcontractors.]
3) Financial Auditing:
The financial auditors have to ensure, amongst other things, that the rules on subcontracting
have been complied with (2.2.1.1 Guidelines on Financial Issues).
4) Contractual Obligations:
Annex II, II.3 - Performance obligations
2. Each contractor shall :
…
e) ensure that any agreements or contracts entered into between the contractor and any
subcontractor, or other third party, contain provisions extending the Commission and
the Court of Auditors’ right to audit any work carried out under the project for which
costs are claimed from the Community financial contribution;
Annex II, II.6 - Sub-contracting
…
2. Any subcontract, the costs of which are to be claimed as an eligible cost, must be
awarded to the bid offering best value for money (best price-quality ratio), under
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conditions of transparency and equal treatment. The following aspects must be taken
into consideration in awarding subcontracts:
…
(d) the contractor shall retain sole responsibility for carrying out the action and for
compliance with the provisions of the contract. The contractor must undertake to
make the necessary arrangements to ensure that the subcontractor waives all rights in
respect of the Commission under the contract;
(e) the contractor must undertake to ensure that the conditions applicable to it under
Articles II.9, II.10, II.11, II.12, II.28.8 and II.29 of the contract are also applicable to
the subcontractor.
II.29 – Controls and audits
…
7. Contractors shall ensure that the rights of the Commission and the Court of Auditors
to carry out audits are extended to the right to carry out any such audit or control on
any subcontractor or third party whose costs are reimbursed in full or in part by the
Community financial contribution, on the same terms and conditions as indicated in
this Article.
4) Consortium Agreement obligations:
8.5
Third Parties
(a)
Each Contractor shall be fully responsible for the performance of any part
of its share of the Project, or other Contract obligation, in respect of which
it enters into any contract with a third party (e.g. a Subcontractor) and shall
ensure (i) such contracts enable fulfilment of the Contract; (ii) the other
Contractors’ Access Rights are the same as would have been the case had
the Contractor performed its share of the Project and/or those obligations
itself; and (iii) the third party shall not have access to any other Contractor’s
Knowledge or Pre-Existing Know-How without that Contractor’s prior
written consent.
(b)
Each Contractor shall in writing inform the other Contractors if it intends
to enter into a contract referred to in Section 8.5(a) (giving the rationale
therefore) if such an event has not been detailed in the Contract Annex I.
Such Contractor shall consider in good faith comments made, pursuant to
the Contract Annex II Article II.6, in relation to such contract.
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Proposal for Subcontracting clauses, CB 5/6/2008, v2
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Intellectual Property:
All results, patentable or not, copyrightable or not, obtained in the execution of the Project by
COMPANY (hereinafter "COMPANY Results") will be communicated to the UNIPV
Technical contact [insert your contact details] in the form of written reports.
UNIPV shall have the right to freely dispose of COMPANY Results and shall own all
intellectual property rights pertaining thereto.
All results patentable or not, copyrightable or not, of the other contractors involved in the
European “MEGAFRAME” FP6 IST project (hereinafter “Contractors”) are the sole property
of said Contractors. The COMPANY shall not own the above mentioned results nor acquire
any licenses or other right to such results hereunder.
COMPANY shall not have access to any other Contractor’s Knowledge or Pre-Existing
Know-How without that Contractor’s prior written consent.
COMPANY shall not attempt to reverse engineer, disassemble, or otherwise analyse or copy
any part of the material received from UNIPV, nor pass it on to third parties. COMPANY
shall promptly return all material received from UNIPV whenever requested to do so, at the
latest at the expiration of the present contract.
Other obligations of the Subcontractor:
COMPANY waives all rights in respect of the European Commission under the EC
MEGAFRAME contract.
The conditions applicable to UNIPV under Articles II.9, II.10, II.11, II.12, II.28.8 and II.29 of
Annex II to the EC MEGAFRAME contract are also applicable to COMPANY.
The latter includes UNIPV’s contractual obligation to ensure that the rights of the Commission
and the Court of Auditors to carry out audits are extended to the right to carry out any such
audit or control on any subcontractor or third party – therefore including COMPANY –
whose costs are reimbursed in full or in part by the Community financial contribution, on the
same terms and conditions as indicated in Article II.29 of Annex II to the EC MEGAFRAME
contract. UNIPV has therefore to point out that:

The Commission may, at any time during the contract and up to five years after the
end of the project, arrange for audits to be carried out, either by outside scientific or
technological reviewers or auditors, or by the Commission departments themselves
including OLAF ;
 The European Court of Auditors shall have the same rights as the Commission,
notably right of access, for the purpose of checks and audits, without prejudice to its
own rules.
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