Lump sum grant

In a lump sum grant the price is fixed before the work starts. You propose a detailed budget, the Commission fixes the total in the grant agreement, and thereafter you are paid against completed work packages at the agreed price. No timesheets, no actual cost statements, no financial audit of what things really cost.

The relief is substantial. The single largest administrative burden in EU projects (recording and justifying personnel time) disappears, and with it the most common source of audit findings and recovered money. For a small organisation without a timesheet culture, this alone can decide whether a project is worth doing.

The catch is that payment follows completion, not effort. A work package that is only partly delivered is not partly paid: the reviewers judge whether it was completed, and an incomplete work package can be paid nothing. Spending the money and falling short of the described output is the failure mode this instrument creates.

That makes the proposal stage more consequential than in an actual-cost grant. The detailed budget table you submit becomes the price, and it cannot be renegotiated upwards later because your assumptions were wrong. Underbid and you deliver at a loss; overbid visibly and you lose points on Implementation.

Describe work packages so that completion is demonstrable. Vague outputs make the reviewer's job a judgement call, and a judgement call about whether you get paid is a risk you introduced yourself. The share of Horizon calls using lump sums keeps growing, so this is not a niche format to learn later.