Sub-contracting in FP7 – the whys and wherefores

We continue the debate on the benefits and pitfalls of using sub-contractors in EU-funded research projects.

Our recent post on the barriers to outsourcing in FP7 projects caused a bit of a stir on LinkedIn. The topic was debated by a variety of people who had some very interesting insights and experiences to share; many thanks everyone for joining in! You can view the conversation here.

It quickly became clear from this online discussion that opinions are mixed on whether sub-contractors are a good or bad idea for FP7 projects. In this post I’ll attempt to summarise the key points that came up.

Pick your task

Some people strongly suggested that sub-contractors should only be hired for certain non-core activities, otherwise they should become a full project partner and be committed and engaged in the project. The European Commission’s guidelines also hold this position, but it is clear from our discussions that many SMEs are put off from partnering with projects because they simply do not have the time, finances or human resources to get deeply involved. Unfortunately, there would probably have to be even more red tape to make it possible for project participants to ‘dip’ in and out of projects.

The key question to ask is whether a participant stands to gain or profit from any IPR generated by the partners. If a company stands to benefit then the consensus seems to be that they should become a project partner. However, IPR rights must be negotiated carefully prior to any project activity (another major time and cost factor which puts off SMEs from participating).

Why projects SHOULD use sub-contractors
We have already written several posts on the topic of sub-contracting in FP7 and maintain that specialist sub-contractors can really strengthen European R&D projects. Here are a few reasons why:

  • Sub-contractors can bring in additional talent, experience and resources and a fresh perspective from outside of the consortium.
  • Sub-contracting is an ideal way for companies, especially SMEs, to get their first taste of EU-funded research. They may decide to become full partners in subsequent projects.
  • Sub-contractors can provide value for money for many services – they may deliver much higher quality for a similar cost compared to partners doing the work themselves (especially non-core activities such as dissemination).
  • Sub-contractors are replaceable (another good test of whether a project participant should be a sub-contractor or partner) and if their work is not up to standard it should be possible to find someone else to do it.

Why projects SHOULD NOT use sub-contractors
During our LinkedIn discussion, several people pointed out some really good reasons and circumstances when projects should steer clear of sub-contractor. These fell under three broad categories:

  • Finances – partners get less than 100% of sub-contracting costs, so sub-contractors are relatively costly to partners;
  • Bureaucracy – there is added paperwork required to get sub-contractors on board;
  • Risk – the use of sub-contractors can potentially expose partners to additional risk (i.e. having access to exploitable IPR and failing to complete tasks on time or to a satisfactory standard).

How to select a sub-contractor

So how does a project coordinator pick the right sub-contractor? Some of our LinkedIn friends said the sub-contractor had to demonstrate their committed to achieving the technical aims of the project. However, we think that most of the technical work will be done by partners. Rather, we think that sub-contractors should simply be committed – their business lives or dies by their professional achievements and they can ill afford the bad press/PR of a poor job.

We believe that sub-contractors should be bound by tightly drawn commercial contract with clear payment against deliverables and penalties. Perhaps academic and SME partners are unused to handling these legal issue aspects, but contracts help everyone to know their obligations and produce good quality work.

Flexibility

The use of sub-contractors in FP7, Horizon 2020 and other EU R&D funding programmes is an issue that we believe many would like to see cleared up. Many companies would like to be more involved in EU research; they could bring many positive elements to the work. But they need, initially at least, the flexibility and financial support to participate in a sub-contracting role. It will be interesting to see how this issue is addressed by the EC in Horizon 2020 and we will certainly return to the issue again here.

Scientia Scripta has considerable experience as a sub-contractor in numerous Framework Programme projects. If your project requires some professional communications or dissemination services then please don’t hesitate to get in touch today.

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