After the approval by the Monitoring Committee projects will enter the contracting phase. This lasts at least 2 full months and it concludes with the signature of the subsidy contract by the Managing Authority and the lead partner.

The subsidy contract is a grant agreement between the contracting authority (managing authority) and the lead partner establishing the responsibilities of both parties, setting up the legal framework for the commitment of funds and the conditions for the project implementation.

During the contracting phase the conditions and recommendations of the Monitoring Committee in respect of the project application need to be answered. A subsidy contract can only be concluded once the contracting requirements are fulfilled. During the contracting phase implementation of projects can start since costs are eligible from the day after the Monitoring Committee approval.  However, projects should notice that the implementation of activities before agreeing on the final form of the project application carries certain risks. Therefore, if  implementation starts already during the contracting phase the recommendations and conditions set by the Monitoring Committee have to be carefully observed by the lead and project partners.

After signature of the subsidy contract, but before the first payment request is submitted, an agreement between the lead partner and project partners has to be concluded. In this partnership agreement, the project partners should give full support to the lead partner to ensure the successful implementation of the project, as well as a high quality and fulfilment of objectives. The partnership agreement formalises the division of mutual responsibilities and rights of partners. It must contain, inter alia, provisions guaranteeing a sound financial management of the funds allocated to the project, including the arrangements for recovering amounts unduly paid.

An example of a partnership agreement is available for download on this website. It is not compulsory for the lead partner and its project partners to adopt the example clauses. Issues that are to be stipulated in the partnership agreement depend on the specific needs of each project. Therefore, the lead partner can negotiate the example of the partnership agreement with its project partners. However, the partnership agreement should fulfil the minimum requirements that are specified in the Programme Manual.