Subcontracting in Horizon Europe

A subcontractor is contracted by a beneficiary to implement a specific (action) task, delivers the agreed service (e.g. works, services or goods), invoices the beneficiary, and is paid a market price.

Costs for subcontracting are not included in the calculation of the 25% flat rate for indirect costs.

Eligibility criteria

For subcontracting costs to be eligible, the following conditions must in particular be fulfilled:

• The outsourced tasks are clearly described as “(action) tasks” in Annex 1 of the GA.
• The corresponding costs are foreseen in the budget (Annex 2 of the GA, category B.).
• The award of the subcontract complies with the principles of:
  • transparency,
  • equal treatment, and
  • best value for money (or lowest price, where appropriate).
• No conflict of interest exists.

The inclusion of a subcontractor after the start of the project is possible:

• either through an amendment to the GA, or
• through a simplified approval procedure (in this case, the beneficiary bears the risk of ex-post approval by the European Commission).

Liabilities and obligations

Beneficiaries remain fully liable towards the European Commission, both:

• technically (e.g. proper implementation of the action task), and
• financially.

They must ensure that subcontractors comply with relevant obligations under the GA (e.g. audit rights of the European Commission).

Limitations

Subcontracting is not allowed in the following cases:

• Subcontracting to other beneficiaries within the same project
• Outsourcing of core project tasks (in particular tasks of the coordinator)

Subcontracting is only allowed in duly justified exceptional cases for:

• Subcontracting to affiliated entities

Distinction from "Purchases"

Further Information

• Annotated Grant Agreement (AGA) – Articles 6.2.B and 9.3
• Online information package: Third Parties in Horizon Europe (in German only)