Subcontracting in the H2020 SME Instrument – Can subcontractors be changed?

Projects have a life of their own and things do not always go exactly as planned.
Sometimes subcontractors may no longer be able to perform their tasks and have to drop out in the middle of the project.
Life happens.

The H2020 SME Instrument has mechanisms to account for this contingency by allowing subcontractors to be changed during project execution. But this change must be made with the same rigor used to select the original subcontractor by means of a competitive procedure with best value for money standards.

Guidelines to take into account:

  • Subcontractors are directly involved in the implementation of project tasks;
  • Subcontractor costs are not taken into account in the application of the flat rate for indirect costs;
  • There should be a contract in place between the beneficiary and the subcontractor;
  • Subcontracting is a business interaction; the subcontractor charges a price which usually includes a profit;
  • Subcontracts are awarded on the basis of best value for money (or lowest price) and the absence of conflicts of interest;
  • A competitive selection procedure must be implemented.

If you intend to amend the Grant to change a subcontract assessed during proposal evaluation, contact the Commission or your Project Officer.

Approval can be requested via:

  • A formal amendment process, or
  • A simplified approved procedure in the reporting period.

In the case of a formal amendment, the request will only be accepted if the change of subcontractor  (if known before awarding the grant) has no impact on the award decision. Changes to a subcontract may only be done if the assessment on best value for money is approved by the Commission. If subcontracts are added via the simplified approval procedure there is NO assessment, thus the beneficiary will bear the full risk.

The Commission may approve subcontracts not included in Annex 1 and 2 of the Grant without amendment, if:

  • they are specifically justified in the periodic technical report, and
  • they do not entail changes to the agreement which call into question the decision awarding the Grant or breach the principle of equal treatment of applicants.

Would you like to know more about how to change a subcontractor in H2020 SME Instrument projects? Contact for more information and guidance.