Third party

Third party is the umbrella term for anyone outside the consortium who nevertheless contributes to the project. The rules differ sharply by which kind you have, so the first job is to identify which one you are dealing with.

A SUBCONTRACTOR sells you work at a market price under a contract. An IN-KIND CONTRIBUTOR provides staff, equipment or facilities to a beneficiary (either against payment or free of charge) and the costs are charged by the beneficiary rather than by the third party. A RECIPIENT OF FINANCIAL SUPPORT receives a small grant from the project through an open call, which is what cascade funding means.

Whether the arrangement is declared in the proposal decides whether it is eligible. In-kind contributions and planned subcontracting belong in the description of the action; support to third parties must be foreseen in the topic and described in detail. Adding an undeclared third party later means an amendment at best and ineligible costs at worst.

The distinction matters financially because the flat rate for indirect costs is calculated on direct costs excluding subcontracting and excluding financial support to third parties. Moving work from your own staff to a subcontractor therefore costs you the 25% overhead on that amount as well as the margin the supplier charges.

Access rights follow the same logic. A subcontractor generally acquires no rights to the results and no obligations to grant access, which is fine for a testing laboratory and dangerous for anyone doing creative technical work. If a third party might generate something patentable, it should not be a subcontractor.