A subcontractor is called upon by a beneficiary to implement an "action task" and issues an invoice for the service provided (work or service, delivery of goods) at regular market prices.
The costs for subcontracting are not considered when calculating the 25% flat rate for indirect costs.
Among others, the eligibility criteria require that subcontracting must always be awarded on the basis of best value for money and/or lowest price.
Another eligibility requirement is that the tasks of the subcontractor are agreed as "action tasks" in Annex 1 to the GA and the related costs of the subcontractor are included in the budget of Annex 2 to the GA (budget category B).
An amendment or a "simplified approval procedure" is necessary for the admission of subcontracting after signature of the GA. In the latter case, the beneficiary bears the risk of ex-post recognition of costs by the EU Commission.
The beneficiary who has awarded the subcontract is responsible for the work of the subcontractor (e.g. quality of work, timely completion). The beneficiary must ensure that subcontractors comply with certain obligations of the GA (e.g. audits by the European Commission).
It is not allowed to award subcontracts to beneficiaries of the same action or to delegate the core tasks of the coordinator (see article 7 of the GA).
Subcontracting to "affiliated entities" (e.g. parent, subsidiary, associated companies) is eligible only in exceptional cases.
The delineation to "purchases":
- purchases are budgeted and reported under the budget category "C.3 other goods, works and services"
- purchases do not refer to the direct implementation of "action tasks", but are needed for their implementation by the beneficiary
- it is not obligatory to indicate purchases in Annex 1 to the GA
- the costs for purchases are considered when calculating the 25% flat rate for indirect costs
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