Rigorous negotiations concerning budget
February 28th, 2008 — ChristianeWe are experiencing at present a very rigorous negotiation concerning the budget. The PO questions a lot of the equipment needed, part of the travel costs (travel to conferences) etc, although the ESR had stated: “Resources allocated are adequate, both in terms of equipment, travelling and labour.”
Of course we know that the EC will not pay for anything excessive and we don’t regard the required resources as excessive. Also I have experienced some other negotiations before, but never, that almost everything was put into question.
Does anyone else have experiences or some ideas what we can do - apart from defending the resources? Has a PO the right to eliminate so many things from our budget, which would probably lead to a budget cut?
Thanks in advance and kind regards,
Christiane
February 29th, 2008 at 3:12 pm
Christiane, check the amount in the Negotiation Mandate. This is the ceiling and resered by the Commission. If yr PO is pushing far lower then either s/he is trying something or, more likley I think, s/he needs more justification. Just keep yr back straight! In the event the Negotiation Mandate is far lower than your proposed budget, there is not much that you can do: swallow or withdraw.
GL,
Henk
February 29th, 2008 at 4:46 pm
Dear Henk,
thanks for the answer. I am talking here about discussions within the Negotiation Mandate - which is only slightly below the original proposed budget. We had to change a few things in the budget and describe costs more in details (very much in detail indeed) and now they start questioning everything. Taking them out would result in a budget below the Mandate - and endanger the project.
So far I had also thought that this is not about cutting costs but about justification. But in the last e-mail the PO clearly wrote: “these are the cost items to be negotiated or in some cases simply reduced or put into overheads cost category”. Now I really start wondering, where they are heading to.
Kind regards,
Christiane
March 1st, 2008 at 11:23 am
Dear Christiane:
I found over the years POs come in two flavours:
1. Burocrats that think in rules, not in solutions, and in tasks, not in objectives. They are a pain to work with, and the best strategy is to do what they say and nothing more.
2. S&T enthusiasts. They are great but now and then smack their nose against the wall of the Legal & Finance dept. That can make them nervous, and a good strategy is to be supportive to THEM so they can win the battle with their bosses shd that be necessary.
In this case for me it is difficult to judge where this PO fits in. Is s/he young, fresh? or an old hand? I fear that the more details you provide the more questions you get fired back. I always keep my back straight, pointing that this is a BUDGET, and that all costs will be duly justified. Build in a review moment (not only S&T but also re costs, eg mid-term - if not done yet); this shows the Commission you (and they) are in finance control. If you go lower in budget, make sure you drop some work - quid pro quo. If that is impossible (you lose critical tasks or critical mass) make that clear. Look into repeats of experiments: maybe you can win something here. This PO doesnt want to lose face by accepting all yr costs, so throw him/her a bone on points where s/he makes a remark.
Sorry for the long post. HTH a bit.
GL, Henk
March 26th, 2008 at 1:04 pm
Just an update on this issue: we are now below negotiation mandate. With only the very general statement, that the EC may still decrease the grant.
The PO (a younger one) got on discussing lots of details - which we had to provide first of course - whether a single travel will cost 50 EUR more or less and this kind of thing.
We are also in the strange situation now, that for some equipment items - which have to be justified already in Annex I per every single item - he is only willing to finance half of the costs (depreciaton costs of course), although those items will only be purchased and used for the project. It will be interesting how to put this into the financial statement.
As we want to finish those languish negotiations we will leave it at that. But in general, would it be possible to object somewhere against a very restrictive PO? In my opinion it’s not in line with FP7 rules what’s happening here.
Kind regards,
Christiane