Brussels, 12 October 2005
Cutting down red tape for EU contracts and grants
Simplify significantly the administrative burden for companies, SMEs and beneficiaries of EU grants while maintaining a high level of protection of the community funds – this is the goal of new measures announced today by the European Commission. Based mainly on the practical experience of the Commission's services, the proposed simplifications will bring procedural requirements in line with the risks and stakes involved. Particular attention is given to small organisations and projects: the smaller the amounts and risks, the easier and quicker the access to EU funding will be.
Recent experience shows that many small organisations such as SMEs, NGOs and educational institutions that want to work with the EU Institutions or apply for EU funding are discouraged by the amount of time and expenses required to compile the necessary documents. The new round of proposals adopted today will improve the situation for the daily management of contracts and grants, both for beneficiaries who will face fewer hurdles and for managers in the EU Institutions who will be able to act more quickly and efficiently. The measures proposed are designed to maintain the highest standards of control over the use of EU funds and guard against fraud. New rules should be in place by 2007, in time to allow the smooth functioning of a new generation of EU-funded programmes.
Contracts and grants: Higher thresholds, simpler procedures, less paperwork
The main simplifications concerning contracts are:
- In general, simpler tender procedures will be used for contracts with a value below € 60,000, instead of € 50,000. In particular, the requirements on proof of financial capacity may be waived for contracts below the new threshold.
- Small organisations face particular difficulties in providing evidence that they have no previous malpractice convictions, are not bankrupt and are making proper tax and social security contributions. The current proposal raises significantly the thresholds below which the tenderers may be allowed to replace these documents with a simple declaration on their honour.
- Similar simplifications are introduced for contracts in the field of external aid, but with much higher thresholds (€200,000 for services; €150,000 for supplies; €5,000,000 for works).
- Tailor-made provisions will apply to contracts above the € 60,000 threshold in the fields of research and communication, to take their specificities into account.
The main simplifications concerning grants are:
- Simplified grant procedures and lighter documentation requirements will apply to the newly defined "grants of small amount" (less than or equal to €25,000).
- Whereas currently beneficiary organisations must partially finance the projects supported by the grant (so-called "co-financing"), they will in certain cases be able to replace this with co-financing in kind (for example through the work done by some of their staff).
- To obtain significant payments at the outset of their project (so called "pre-financing"), beneficiary organisations such as NGOs need to provide financial guarantees, which often represent a substantial financial obstacle. With the new proposal, after assessing the risks, this requirement for grant pre-financing below €60,000 may be waived.
- All educational institutions, and not only secondary and higher education institutions, will no longer be subject to verification of their financial capacity to be able to benefit from EU grants.
- For other beneficiary organisations, the grant thresholds for which an external audit is required is increased from €300,000 to €750,000 for grants related to specific projects, and from €75,000 to €100,000 for grants to finance operational costs of the organisations.
Background
This proposal follows a first set of simplification proposals adopted by the Commission on 3 May 2005 (see IP/05/520), which is currently being discussed by the European Parliament and the Council. Based on these discussions, the Commission will propose a last series of simplifications with the objective of having the complete simplification package in place by 31 December 2006, before the entry into force of the new generation of EU programmes.
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