Gf A Sme

Contracting Authority: Central Finance and Contracting
Agency

SME Pilot Grant Scheme - Support for Increasing the
Competitiveness and Exports of Croatian SMEs

Guidelines
for grant applicants
Budget line: Croatia 2006 Phare National Programme
Reference: 2006-0808-0101
Deadline for submission of proposals: 21 April 2008

2007 Page 1

Table of contents

1. THE SMES PILOT GRANT SCHEME - SUPPORT FOR INCREASING THE
COMPETITIVENESS AND EXPORTS OF CROATIAN SMES............................................................... 3

1.1 Background ........................................................................................................................................ 3

1.2 Objectives of the programme and priority issues for 2007.............................................................. 3

1.3 Financial allocation provided by the contracting authority ............................................................ 4

2. RULES FOR THIS CALL FOR PROPOSALS.................................................................................... 5

2.1 Eligibility criteria................................................................................................................................. 5
2.1.1 Eligibility of applicants: who may apply? ....................................................................................... 5
2.1.2 Partnerships and eligibility of partners............................................................................................ 6
2.1.3 Eligible actions: actions for which an application may be made..................................................... 6
2.1.4 Eligibility of costs: costs which may be taken into consideration for the grant .............................. 9
2.2 How to apply, and the procedures to follow…………………………………… ………………...9
2.2.1 Application form ........................................................................................................................... 10
2.2.2 Where and how to send the Applications ...................................................................................... 10
2.2.3 Deadline for submission of Applications ...................................................................................... 11
2.2.4 Further information for Applications ............................................................................................ 11

2.3 Evaluation and selection of applications ......................................................................................... 12

2.4 Submission of supporting documents for provisionally selected proposals ................................. 18

2.5 Notification of the Contracting Authority’s decision ..................................................................... 20
2.5.1 Content of the decision....................................................................................................................... 20
2.5.2 Indicative time table........................................................................................................................... 20

6 Conditions applicable to implementation of the action following the Contracting Authority's
decision to award a grant............................................................................................................................... 21

3. LIST OF ANNEXES.............................................................................................................................. 22

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1. THE SMES PILOT GRANT SCHEME - SUPPORT FOR INCREASING THE
COMPETITIVENESS AND EXPORTS OF CROATIAN SMES

1.1 BACKGROUND

Micro, small and medium-sized enterprises (SMEs) play a central role in the European economy. They are a
major source of entrepreneurial skills, innovation and employment and account for a large proportion of
Europe’s economic and professional activity. In practice, 99% of businesses in the European Union are
SMEs, accounting for 23 million enterprises and more than 100 million jobs.1European Union has recognized
the importance and the potential of SMEs adopting the Charter for Small Enterprises pledging its
commitment for creation of environment crucial for SME development.
Croatia in recent years has put major effort in adopting the principles of the Charter in its strategic national
documents such as Strategic Development Framework for 2006-2013 and Strategic Coherence Framework
2007-2013 that set the goals of development and improved competitiveness of Croatian economy in the
context of its EU accession process by fostering improvement of production capacity, increasing the quality
of the products and strengthening of human resources in the SMEs.
In order to put emphasis on the implementation of those principles, Croatian Ministry of Economy, Labour
and Entrepreneurship has recognized the need to launch a pilot PHARE 2006 Grant Scheme Programme that
will contribute to strengthening of competitiveness of Croatian SMEs and give them an opportunity to gain
experience and skills in implementation and management of projects financed under EU funds, mainly
forthcoming Instrument for Pre-Accession (IPA) and later Structural Funds.
The evidence available from research on the Croatian SME export sector (“The Export Potential of Croatian
SMEs” (Institute Ivo Pilar, 2005), “The Competitiveness of Croatian Exports to the EU” (IMO, 2005) and
“Impact Evaluation of Promotional Programmes for SMEs and Exporters in Croatia” (Consensus, 2005)) as
well as “SME Policy Index 2007 – Report on the implementation of the European Charter for Small
Enterprises in the Western Balkans” and World Bank (IFC) Doing Business Report 2006/07 highlights a
number of key issues which this SME pilot grant scheme seeks to address:
• Croatian SMEs need stronger relationships with partners, in order to more easily and quickly
develop new and competitive products and to produce quality products to match international
standards and certification.
• Croatian products have lost a significant share of their traditional markets within the EU. The
markets for Croatian exports, within the EU, are changing and, as a result, exports to the EU have
remained stagnant in absolute terms.
• Few Croatian products emerge as “champions” in the export markets of the European Union and
relative prices of Croatian products in the important EU markets are too high.
• Croatian export products have become less technologically sophisticated over time as measured
by factors such as the relative importance of raw materials and labour versus advanced factors
such as technology, skills and the advantages of economies of scale in production.
• There is an urgent need to encourage the “export mentality” among SMEs.
Therefore, Ministry of Economy, Labour and Entrepreneurship as the institution responsible for the technical
implementation of the programme as well as co-ordination of the monitoring of the grants awarded and
Central Finance and Contracting Agency (CFCA) as the institution responsible for the correct use of grant
funds as well as tendering, contracting and payments, are launching this Call for Proposals to contribute to
addressing the above mentioned key issues.

1.2 OBJECTIVES OF THE PROGRAMME AND PRIORITY ISSUES FOR 2007
The objective of this export oriented SMEs Pilot Grants Scheme is to enhance competitiveness and
productivity and to increase the volume of exports in order to ensure that Croatian enterprises remain

1 Source: Eurostat and European Observatory of SMEs,2006

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competitive within the Single Market and to promote convergence by especially encouraging export SMEs
located in the areas lagging behind to raise their capacities to compete with their products abroad.

The priority issues for 2007 involves the provision of consultancy essential for enhancing competitiveness
and increasing exports through strengthening of SME’s technological capacity and cooperation as well as
developing and applying best practices to:
1. Establishment and incorporation of procedures for the testing and certification of Croatian products in
order to ensure compliance with International Quality standards.
2. Improving the marketing, promotion and presentation of Croatian products within the EU single market.
3. Providing / organizing training for staff in technical, marketing and quality assurance departments in
order to ensure that the companies have human resources able to meet and implement the requirements
needed to enhance their competitiveness and exports on the Single Market.

It will be of importance for all project proposals to demonstrate their contribution to attainment of the goals
of the Lisbon Agenda, namely contributing to the enhancement of economic growth, employment, R&D and
Information and Communication Technology (ICT).

1.3 FINANCIAL ALLOCATION PROVIDED BY THE CONTRACTING AUTHORITY
The overall indicative amount made available under this call for proposals is EUR 2.700.000 of which EUR
2.000.000 is allocated from the Phare funds and EUR 700.000 is national public co-financing (contribution of
the Ministry of Economy, Labour and Enterperneurship). The Contracting Authority reserves the right not to
award all available funds.

Size of grants

Any grant awarded under this programme must fall between the following minimum and maximum amounts:

• minimum amount: EUR 50.000
• maximum amount: EUR 100.000

In addition, no grant may exceed 75 % of the total eligible costs of the action (see also section 2.1.4) for the
applicants located in Croatia, but outside Areas of Special State Concern . Applicants located within Areas of
Special State Concern2 will be eligible for a maximum grant of 85% of the total eligible costs of the action
(see also section 2.1.4).The balance must be financed from the applicant's or partners' own resources, or from
sources other than the European Community budget or the European Development Fund.

Please note that grants to be awarded under this Call for proposals constitute “de-minimis” aid as described in
the Government Decree on publishing “de minimis” rules (Official Gazzette, 45/2007). According to the
provisions of that Decree, generally it is allowed to receive maximum of 200.000 EUR of de minimis aid
(gross) during three fiscal years. For details please turn to the a.m. Government decree.
The a.m. provision on de minimis applies to the applicant and each of its’ partners, according to the statement
on the planned distribution of grant amount among applicant and each partner (See heading 2.4. Submission
of supporting documents for provisionally selected proposals, point 13).

2 This includes areas covered with Law on Area of Special State Concern ( Official Gazzete 4/96., 57/96., 124/97.,
78/99., 73/00., 87/00., 127/00., 94/01., 88/02. and 42/05) and in accordance with Decision on Confirmation of the
Status of Municipalities Belonging to the Third Category of ASSC (Official Gazzete 138/02) , areas as stated in the
Law on Mountain and Hilly areas ( Official Gazzete 12/02., 32/02., 117/03. and 90/05. ) and areas as stated in the
Law on Islands ( Official Gazzete 34/99., 32/02., 33/06)

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2. RULES FOR THIS CALL FOR PROPOSALS

These guidelines set out the rules for the submission, selection and implementation of actions financed under
this call, in conformity with the provisions of the Practical Guide to contract procedures for EC external
actions, which is applicable to the present call (available on the Internet at this address:
http://ec.europa.eu/europeaid/work/procedures/index_en.htm).

2.1 ELIGIBILITY CRITERIA
There are three sets of eligibility criteria, relating to:

• applicant(s) which may request a grant (2.1.1), and their partners (2.1.2),
• actions for which a grant may be awarded (2.1.3),
• types of cost which may be taken into account in setting the amount of the grant (2.1.4).

2.1.1 Eligibility of applicants: who may apply?

(1) In order to be eligible for a grant, applicants must:

• Be a registered SME according to the Croatian definition3 (which includes trade companies, crafts and
cooperatives )
( micro enterprises with less than 10 employees are not eligible); and
• Be an export-oriented SME (at least 25% of the turnover in 2006 is gained from the exports); and
• Be fully privately owned; and
• Be located / headquartered in Croatia; (i.e. be legally registered as per Croatian legislation) and
• Be able to demonstrate a profit after taxation in the fiscal year preceding the date of grant application and
• Be able to demonstrate solvency of the company and
• Be able to demonstrate that contributions and taxes have been settled and
• Be nationals4 of a Member State of the European Union or Croatia, Turkey, Macedonia, Bosnia and
Herzegovina, Albania, Serbia, Montenegro and
• Be directly responsible for the preparation and management of the action with their partners, not acting as
an intermediary
• The applicant must be fully compliant with the “de minimis aid” provisions as specified in the
Government Decree on publishing “de minimis” rules (Official Gazzette, 45/2007)
(2) Potential applicants may not participate in calls for proposals or be awarded grants if they are in any of
the situations which are listed in Section 2.3.3 of the Practical Guide to contract procedures for EC external
actions (available from the following Internet address:
http://ec.europa.eu/europeaid/work/procedures/index_en.htm);
Applicants must not derive profit from the grant, i.e., the grant can only cover the costs of activities.

3 as defined in Article 2 and 3 in the SME Encouragement Act (Officil Gazzete, and Article 1 and 2 of the Law on Changes and
Amendments on the SME Encouragement Act (Official Gazzete, 64/07)

4 Such nationality being determined on the basis of the organisation's statutes which should demonstrate that it has been
established by an instrument governed by the internal law of the country concerned. In this respect, any legal entity whose
statutes have been established in another country cannot be considered an eligible local organisation, even if they are
registered locally or accompanied by a “Memorandum of Understanding”.
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In part B section VI of the grant application form (“Declaration by the applicant”), applicants must declare
that they do not fall into any of the situations.

While the scheme is open to all eligible applicants (see 2.1.1) throughout Croatia, weighting ( see 2.3) and co-
financing (see 1.3) is expected to ensure precedence for applicants within areas covered with Law on Area of
Special State Concern, Law on Mountain and Hilly areas and Law on Islands (for detailed list of laws see
section 1.3).

2.1.2 Partnerships and eligibility of partners

Applicants may act individually or with partner organisations.

Applicants’ partners participate in designing and implementing the action, and the costs they incur are
eligible in the same way as those incurred by the grant Beneficiary. They must therefore satisfy the same
eligibility criteria as applicants.

The following are not partners and do not have to sign the “partnership statement”:

• Associates
Other organisations may be involved in the action. Such associates play a real role in the action but may not
receive funding from the grant with the exception of per diem or travel costs. Associates do not have to meet
the eligibility criteria referred to in section 2.1.1. The associates have to be mentioned in Part B section IV -
“Associates of the Applicant participating in the Action” of the Grant Application Form.

• Subcontractors
The grant beneficiaries have the possibility to award contracts to subcontractors. Subcontractors are neither
partners nor associates, and are subject to the procurement rules set out in Annex IV to the standard grant
contract.
The applicant will act as the lead organisation and, if selected, as the contracting party (the "Beneficiary").

2.1.3 Eligible actions: actions for which an application may be made

Definition: An action (or project) is composed of a set of activities.

Duration

The planned duration of an action may not be lower than 4 months nor exceed 12 months from the date of
signature of grant contract.

Sectors or themes

The support only relates to the export oriented SMEs in the following sectors:

Sections/ Economic activities according to NACE rev. 1.1 classification
subsections
DA Manufacture of food products, beverages and tobacco: Production, processing and
preserving of meat and meat products, Processing and preserving of fish and fish products,
Processing and preserving of fruit and vegetables, Manufacture of vegetable and animal
oils and fats, Manufacture of dairy products, Manufacture of grain mill products, starches
and starch products, Manufacture of prepared animal feeds, Manufacture of other food
products, Manufacture of beverages (except 15.91 - 15.96 – manufacture of alcoholic
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beverages and 16 - tobacco products)
DD Manufacture of wood and wood products : Manufacture of builders' carpentry and joinery,
Manufacture of wooden containers, Manufacture of other products of wood; manufacture
of articles of cork, straw and plaiting materials (except 20.1 - Sawmilling and planning of
wood; impregnation of wood; 20.2 - Manufacture of veneer sheets; manufacture of
plywood, laminboard, particle board, fibre board and other panels and boards)
DH Manufacture of rubber and plastic products
DJ Manufacture of basic metals and fabricated metal products: Manufacture of structural
metal products, Manufacture of tanks, reservoirs and containers of metal; manufacture of
central heating radiators and boilers, Manufacture of steam generators except central
heating hot water boilers, Forging, pressing, stamping and roll forming of metal; powder
metallurgy, Treatment and coating of metals; general mechanical engineering,
Manufacture of cutlery, tools and general hardware, Manufacture of other fabricated metal
products (except 27 – basic metals)
DM Manufacture of transport equipment: Building and repairing of pleasure and sporting
boats, Manufacture of motor vehicles, trailers and semi-trailers, Manufacture of other
transport equipment (except 35.11 – building and repairing of ships; 35.2-manufacture of
railway and tramway locomotives rolling stock and 35.3 – manufacture of aircraft and
spacecraft)
DN Manufacturing n.e.c: Manufacture of furniture, Manufacture of jewellery and related
articles, Manufacture of musical instruments, Manufacture of sports goods, Manufacture
of games and toys, Miscellaneous manufacturing n.e.c., Recycling.
K 72 Computer and related activities (except 72.5 Maintenance and repair of office,
accounting and computing machinery and 72.6 Other computer related activities )*
*only software application development and deployment

Note: NACE is derived from the French "Nomenclature statistique des Activités économiques dans la
Communauté Européenne" (Statistical classification of economic activities in the European Community)
(CONSLEG: 1990R3037-20/11/2003)

The ranking of proposals in relation to the themes of proposals

The ranking of proposals, in both the Concept Note and the Full Application Form assessment phase, will be
carried out regardless of the themes, and will be based exclusively on the assessed quality of the proposals.

Location

Actions must take place in Croatia.

Types of action

The following actions are possible under the scheme with respect to the specified priority areas (see
1.2):
• Consultancy essential for enhancing competitiveness and export (e.g. standards, accreditation,
certification, quality assurance systems, conformity etc.);

• Product testing necessary for obtaining relevant standards/ conformity for export production;

• Benchmarking for exports (to study the business activity of the relevant sector in Croatia and
EU in order to position the enterprise against relevant competitors as a basis for its main exporting
strategy);

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• Preparation of marketing and advertising strategies for increasing awareness of Croatian
exporting products;

• Promotion and placement of new exporting products (e.g. brochures, campaigns, presentations,
etc.);

• Branding, design, packaging, etc. of products (e.g. adapting existing/introducing new exporting
product to the market, analysis of product’s life cycle, designing the product, design and safety of
packaging, creating the product name, designing the trademark, product management and brand
management, product / product group /brand positioning on the market, warranty/service);

• Training for technical staff to enhance competitiveness and exports;

• Information, market research, e-commerce (e.g. web sites);(e.g. collecting and analysing
information on specific foreign markets, which are of the interest of the company, with the aim of
determining export opportunities and strategies of entering the foreign market or developing the
existing export. Market research would include collecting and analysing market information
related to specific exporting products of the company. E-commerce should include preparation
and organisation of Internet based goods/services sales of the company);

• Matchmaking / B-to-B(business to business) activities (e.g. consulting service related to match-
making of the company with potential foreign partners in order to expand the company’s export
markets);

• Participation in international fairs and events (individual or collective exhibiting at the
finternational trade fair or exhibition, abroad or in Croatia.).

The following types of action are ineligible:

• actions concerned only or mainly with individual sponsorships for participation in workshops, seminars,
conferences, congresses;
• actions concerned only or mainly with individual scholarships for studies or training courses;
• general information campaigns;
• language courses;
• actions confined only or mainly to restoration of buildings, construction and all capital investments
• Consultancy services that are continuous or periodic activity or relate to enterprise’s operating
expenditures, particularly if related to tax counselling, legal services;
• Projects with provisions for financing the usual (routine) activities, especially covering their operational
costs (not related to the implementation of the project)
• Establishing, assisting or developing any project or activity that contributes to the violation of
internationally recognised workers’ rights rules and regulations in force in Croatia
• Project that has started before signing the contract with the CFCA or receiving funds from any other
sources for the same activity (double funding is strictly prohibited)

Number of proposals and grants per applicant

An applicant may submit more than one proposal under this call for proposals.

An applicant may not be awarded more than one grant under this call for proposals.

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2.1.4 Eligibility of costs: costs which may be taken into consideration for the grant

Only "eligible costs" can be taken into account for a grant. These are detailed below. The budget is therefore
both a cost estimate and a ceiling for "eligible costs". Note that the eligible costs must be based on real costs
based on supporting documents (except for subsistence costs and indirect costs where flat-rate funding
apply).

Recommendations to award a grant are always subject to the condition that the checking process which
precedes the signing of the contract does not reveal problems requiring changes to the budget (for instance
arithmetical errors, inaccuracies or unrealistic costs and other ineligible costs). The checks may give rise to
requests for clarification and may lead the Contracting Authority to impose modifications or reductions to
address such mistakes or inaccuracies. The amount of the grant and the percentage of co-financing as a result
of these corrections may not be increased in any case.

It is therefore in the applicant's interest to provide a realistic and cost-effective budget.

Eligible direct costs

To be eligible under the call for proposals, costs must respect the provisions of article 14 of the General
Conditions to the Standard Grant Contract (see Annex F).

Contingency reserve

A contingency reserve not exceeding 5% of the direct eligible costs may be included in the Budget of the
Action. It can only be used with the prior written authorisation of the Contracting Authority.

Eligible indirect costs (overheads)

The indirect costs incurred in carrying out the action may be eligible for flat-rate funding fixed at not more
than 7% of the total eligible direct costs.

If the applicant is in receipt of an operating grant financed from the Community budget no indirect costs may
be claimed within the proposed budget for the action.

Contributions in kind

Any contributions in kind, which must be listed separately at Annex B, do not represent actual expenditure
and are not eligible costs. The contributions in kind may not be treated as co-financing by the Beneficiary.

The cost of staff assigned to the Action is not a contribution in kind and may be considered as co-financing in
the Budget of the Action when paid by the Beneficiary or his partners.

Notwithstanding to the above, if the description of the action as proposed by the beneficiary foresees the
contributions in kind, such contributions have to be provided.

Ineligible costs

The following costs are not eligible:
– debts and provisions for losses or debts;
– interest owed;
– items already financed in another framework;
– purchases of land or buildings, except where necessary for the direct implementation of the action, in
which case ownership must be transferred to the final beneficiaries and/or local partners, at the latest
by the end of the action;
– currency exchange losses;
– taxes, including VAT, unless the Beneficiary (or the Beneficiary’s partners) cannot reclaim them and
the applicable regulations do not forbid coverage of taxes;
– credits to third parties

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2.2 HOW TO APPLY AND PROCEDURES TO FOLLOW

2.2.1 Application form

Applications must be submitted using the application form annexed to these Guidelines (Annex A). This form
includes guidance for concept note, which must also be drafted. Applicants should keep strictly to the format
of the application and fill in the paragraphs and the pages in order. Please provide budget with round figures.

Applicants must apply in English.

Please complete the application form carefully and as clearly as possible so that it can be assessed properly.

Any error related to the points listed in the Checklist (section V of part B of the grant application form) or
any major inconsistency in the application form (e.g. the amounts mentioned in the budget are inconsistent
with those mentioned in the application form) may lead to the rejection of the proposal.

Clarifications will only be requested when information provided is unclear, thus preventing the Contracting
Authority from conducting an objective assessment.

Hand-written applications will not be accepted.

Please note that only the application form and the published annexes which have to be filled in (budget,
logical framework) will be transmitted to the evaluators and assessors. It is therefore of utmost importance
that these documents contain ALL relevant information concerning the action. No supplementary annexes
should be sent.

2.2.2 Where and how to send the Applications

Applications must be submitted in a sealed envelope by registered mail, private courier service or by hand-
delivery (a signed and dated certificate of receipt will be given to the deliverer) at the address below:

Postal address
Central Finance and Contracting Agency (CFCA)
(Središnja agencija za financiranje i ugovaranje programa i projekata EU)
Ulica grada Vukovara 284/II
10 000 Zagreb
Croatia

Address for hand delivery or by private courier service
Central Finance and Contracting Agency (CFCA)
(Središnja agencija za financiranje i ugovaranje programa i projekata EU)
Ulica grada Vukovara 284/II
10 000 Zagreb
Croatia

Applications sent by any other means (e.g. by fax or by e-mail) or delivered to other addresses will be
rejected.
Applications must be submitted in one original and 3 copies in A4 size, each bound. The complete
application form (part A: concept note and part B: full application form), budget and logical framework must
also be supplied in electronic format (CD-Rom) in a separate and unique file (e.g. the application form must

2007 Page 10

not be split into several different files). The electronic format must contain exactly the same proposal as the
paper version enclosed.
The Checklist (Section V of part B the grant application form) and the Declaration by the applicant (Section
VI of part B of the grant application form) must be stapled separately and enclosed in the envelope.
Where an applicant sends several different proposals (if allowed to do so by the Guidelines of the Call), each
one has to be sent separately.
The outer envelope must bear the reference number and the title of the call for proposals, together with
the title, the full name and address of the applicant, and the words "Not to be opened before the opening
session" and "Ne otvarati prije sastanka odbora za ocjenjivanje projekata".

Applicants must verify that their application is complete using the checklist (section V of part B of the
grant application form). Incomplete applications may be rejected.

2.2.3 Deadline for submission of Applications

The deadline for the submission of applications is 21 April 2008, 14.00 CET as evidenced by the date of
dispatch, the postmark or the date of the deposit slip. In case of hand-deliveries, the deadline for receipt is at
21 April 2008, 14.00 CET as evidenced by the signed and dated receipt. Any application submitted after the
deadline will automatically be rejected.

2.2.4 Further information for Applications

The date and place of the information sessions on this call for proposals will be published on the internet at:
http://cfcu.mfin.hr/tenderYYY/PHARE_2006.htm
www.mingorp.hr
www.izvoz.hr
within 4 days of the launch of this call for proposals.

Questions may in addition be sent by e-mail no later than 21 days before the deadline for the submission of
proposals to the address listed below, indicating clearly the reference of the call for proposals:

E-mail address: grants.cfcu@mfin.hr

Replies will be given no later than 11 days before the deadline for the submission of proposals.

In the interest of equal treatment of applicants, the Contracting Authority cannot give a prior opinion on the
eligibility of an applicant, a partner or an action.

Questions that may be relevant to other applicants, together with the answers, will be published on the
internet at the CFCA website: http://cfcu.mfin.hr and the EuropeAid website:
http://ec.europa.eu/europeaid/cgi/frame12.pl

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2.3 EVALUATION AND SELECTION OF APPLICATIONS

Applications will be examined and evaluated by the Contracting Authority with the possible assistance of
external assessors. All actions submitted by applicants will be assessed according to the following steps and
criteria:

(1) STEP 1: OPENING SESSION AND ADMINISTRATIVE CHECK

The following will be assessed:

• The deadline has been respected. If the deadline has not been respected the proposal will automatically
be rejected.

• The Application Form satisfies all the criteria mentioned in the Checklist section V of part B of the
grant application form). If any of the requested information is missing or is incorrect, the proposal
may be rejected on that sole basis and the proposal will not be evaluated further.

Following the opening session and the administrative check, the Contracting Authority will send a letter to all
applicants, indicating whether their application was submitted prior to the deadline, informing them of the
reference number they have been allocated, whether they have satisfied all the criteria mentioned in the
checklist and whether their Application Form/ Concept Note has been recommended for evaluation.

(2) STEP 2: EVALUATION OF THE CONCEPT NOTE

The evaluation of the Concept Notes that have passed the first administrative check will cover the relevance
of the action, its merits and effectiveness, its viability and sustainability. The Contracting Authority reserves
the right to skip the evaluation of the Concept Notes whenever considered justified (for example when a less
than expected number of proposals are received) and to go straight to the evaluation of the corresponding full
proposals.
Please note that the scores awarded to the Concept Note are completely separate from those given to the Full
Application.

The Concept Note will be given an overall score out of 50 points in accordance with the breakdown provided
in the Evaluation Grid below. The evaluation shall also verify the compliance with instructions provided in
the guidance for Concept Note, part A of the grant application form.

If the examination of the Concept Note reveals that the proposed action does not meet the eligibility criteria
stated in paragraph 2.1.3, the proposal shall be rejected on this sole basis.

The evaluation criteria are divided into headings and subheadings. Each subheading will be given a score
between 1 and 5 in accordance with the following assessment categories: 1 = very poor; 2 = poor; 3 =
adequate; 4 = good; 5 = very good.

Scores
1. Relevance of the action Sub-score 15
1.1 Relevance of the problems to needs and constraints of the country/region to be 5
addressed in general, and to those of the target groups and final beneficiaries in particular

1.2 Relevance to the priorities and objectives mentioned in the Guidelines 5(x2)*

2. Effectiveness and Feasibility of the action Sub-score 25

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2.1 Assessment of the problem identification and analysis 5

5(x2)*
2.2 Assessment of the proposed activities (practicality and consistency in relation to the
objectives, purpose and expected results).
5(x2)*
2.3 Assessment of the role and involvement of all stakeholders and proposed partners.

3. Sustainability of the action Sub-score 10
3.1 Assessment of the identification of the main assumptions and risks, before the start up 5
and throughout the implementation period.
5
3.2 Assessment of the identification of long-term sustainable impact on the target groups
and final beneficiaries.
TOTAL SCORE 50

*the scores are multiplied by 2 because of their importance

The evaluation committee will utilise the following evaluation sub grids to complete the main grid in the
evaluation of the Concept Note:

1. Relevance of the action Sub-score
1.1 Relevance of the problems to needs and constraints of the country/region to be 5
addressed in general, and to those of the target groups and final beneficiaries in particular
1.1.1 Is the Applicant located within an assisted area according to the Law on
Areas of Special State Concern or the Law on Hilly and Mountainous Areas or
according to the Law on Islands?

Note: Maximum score of 5 points can be awarded only to projects where
applicant is located within ASSC
1.2 Relevance to the priorities and objectives mentioned in the Guidelines 5(x2)*
1.2.1 Accordance with priorities and objectives set in GfA ;
1.2.2 Will the project contribute to strengthening of the SME’s exporting capacity
in terms of competitiveness, productivity and volume of exports?
1.2.3 Will the project contribute to raising SME’s production standards?
1.2.4 Will the project address horizontal issues?

2. Effectiveness and Feasibility of the action Sub-score
2.1 Assessment of the problem identification and analysis 5

5(x2)*
2.2 Assessment of the proposed activities (practicality and consistency in relation to the
objectives, purpose and expected results).
5(x2)*
2.3 Assessment of the role and involvement of all stakeholders and proposed partners.
2.3.1 Is the role of Applicant clear; is the need for partnership justified?
2.3.2 Is the partner(s)’ role in the implementation of activities reasonable and
realistic?

3. Sustainability of the action – no sub grid

*the scores are multiplied by 2 because of their importance

Once all Concept Notes have been assessed, a list will be established with the proposed actions ranked
according to their total score.

2007 Page 13

Firstly, only the Concept Notes which have been given a score of a minimum of 12 points in the category
"Relevance" as well as a minimum total score of 30 points will be considered for pre-selection.

Secondly, the list of Concept Notes will be reduced in accordance to the ranking to those whose sum of
requested contributions amounts to 2 times the available budget for this Call for proposals. The Evaluation
Committee will subsequently proceed with the evaluation of the full proposals of the pre-selected applicants.

STEP 3: EVALUATION OF THE FULL APPLICATION

An evaluation of the quality of the proposals, including the proposed budget, and of the capacity of the
applicant and his partners, will be carried out in accordance with the evaluation criteria set out in the
Evaluation Grid included below. There are two types of evaluation criteria: selection and award criteria.

The selection criteria are intended to help evaluate the applicants' financial and operational capacity to
ensure that they:

• have stable and sufficient sources of finance to maintain their activity throughout the period during which
the action is being carried out and, where appropriate, to participate in its funding;

• have the management capacity, professional competencies and qualifications required to successfully
complete the proposed action. This also applies to any partners of the applicant.

The award criteria allow the quality of the proposals submitted to be evaluated in relation to the set
objectives and priorities, and grants to be awarded to actions which maximise the overall effectiveness of the
call for proposals. They enable the selection of proposals which the Contracting Authority can be confident
will comply with its objectives and priorities and guarantee the visibility of the Community financing. They
cover such aspects as the relevance of the action, its consistency with the objectives of the call for proposals,
quality, expected impact, sustainability and cost-effectiveness.

If the examination of the proposal reveals that the proposed action does not meet the eligibility criteria stated
in paragraph 2.1.3, the proposal shall be rejected on this sole basis.

Scoring:

The evaluation criteria are divided into sections and subsections. Each subsection will be given a score
between 1 and 5 in accordance with the following guidelines: 1 = very poor; 2 = poor; 3 = adequate; 4 =
good; 5 = very good.

Evaluation Grid

Maximum
Section
Score
1. Financial and operational capacity 20
1.1 Do the applicant and partners have sufficient experience of project 5
management?
1.2 Do the applicant and partners have sufficient technical expertise? (notably 5
knowledge of the issues to be addressed.)
1.3 Do the applicant and partners have sufficient management capacity? 5
(including staff, equipment and ability to handle the budget for the action)?
1.4 Does the applicant have stable and sufficient sources of finance? 5
2. Relevance 25
2.1 How relevant is the proposal to the objectives and one or more of the 5x2
priorities of the call for proposals?
Note: A score of 5 (very good) will only be allocated if the proposal
specifically addresses at least one priority.

2007 Page 14

Note: A score of 5 (very good) will only be allocated if the proposal contains
specific added-value elements, such as promotion of gender equality and
equal opportunities…
2.2 How relevant to the particular needs and constraints of the target 5
country/countries or region(s) is the proposal? (including avoidance of
duplication and synergy with other EC initiatives.)
2.3 How clearly defined and strategically chosen are those involved (final 5x2
beneficiaries, target groups)? Have their needs been clearly defined and does
the proposal address them appropriately?

3. Methodology 25
3.1 Are the activities proposed appropriate, practical, and consistent with the 5
objectives and expected results?
3.2 How coherent is the overall design of the action? 5
(in particular, does it reflect the analysis of the problems involved, take into
account external factors and anticipate an evaluation?)
3.3 Is the partners' level of involvement and participation in the action 5
satisfactory?
Note: If there are no partners the score will be 1.
3.4 Is the action plan clear and feasible? 5
3.5 Does the proposal contain objectively verifiable indicators for the outcome 5
of the action?
4. Sustainability 15
4.1 Is the action likely to have a tangible impact on its target groups? 5
4.2 Is the proposal likely to have multiplier effects? (including scope for 5
replication and extension of the outcome of the action and dissemination of
information.)
4.3 Are the expected results of the proposed action sustainable: 5
- financially (how will the activities be financed after the funding ends?)
- institutionally (will structures allowing the activities to continue be in place
at the end of the action? Will there be local “ownership” of the results of
the action?)
- at policy level (where applicable) (what will be the structural impact of the
action — e.g. will it lead to improved legislation, codes of conduct, methods,
etc?)?
5. Budget and cost-effectiveness 15
5.1 is the ratio between the estimated costs and the expected results satisfactory? 5
5.2 Is the proposed expenditure necessary for the implementation of the action? 5x2
Maximum total score 100

Note on Section 1. Financial and operational capacity

If the total average score is less than 12 points for section 1, the Evaluation Committee will reject the
proposal.

Note on Section 2. Relevance

If the total average score is less than 20 points for section 2, the Evaluation Committee will reject the
proposal.

Provisional selection

Following the evaluation, a table listing the proposals ranked according to their score and within the available
financial envelope will be established as well as a reserve list following the same criteria.
Note: The scores awarded in this phase are completely separate from those given to the concept note of the
same application.

2007 Page 15

The evaluation committee will utilise the following evaluation sub grids to complete the main grid:

1. Financial and operational capability - no sub-grid

2. Relevance 25
2.1 How relevant is the proposal to the objectives and one or more of the 5x2
priorities of the call for proposals?
2.1.1 Will the project contribute to strengthening of the SME’s exporting capacity
in terms of competitiveness, productivity and volume of exports?
2.1.2 Will the project contribute to raising SME’s production standards?
2.1.3 Will the project address horizontal issues?

2.2 How relevant to the particular needs and constraints of the target 5
country/countries or region(s) is the proposal? (including avoidance of
duplication and synergy with other EC initiatives.)
2.2.1 Is the Applicant located within an assisted area according to the Law on
Area of Special State Concern or the Law on Hilly and Mountainous Areas
or according to the Law on Islands?
Note: Maximum score of 5 points can be awarded only to projects where
applicant is located within ASSC.
2.3 How clearly defined and strategically chosen are those involved (final 5x2
beneficiaries, target groups)? Have their needs been clearly defined and does
the proposal address them appropriately?
2.3.1. Have the final beneficiaries and the target groups been clearly identified
and linked to the objectives of the project?
2.3.2. Have their needs been logically derived from the problem tree and does the
proposal reflect the findings from the objective tree?
3. Methodology 25
3.1 Are the activities proposed appropriate, practical, and consistent with the 5
objectives and expected results?

3.2 How coherent is the overall design of the action? 5
(in particular, does it reflect the analysis of the problems involved, take into
account external factors and anticipate an evaluation?)

3.3 Is the partners' level of involvement and participation in the action 5
satisfactory?
Note: If there are no partners the score will be 1.
3.3.1 Is the role of each partner in managing the action clearly defined?

3.4 Is the action plan clear and feasible? 5
3.4.1 Is the timetable realistic?
3.4.2 Are the required actions clearly described?

3.5 Does the proposal contain objectively verifiable indicators for the outcome 5
of the action?
3.5.1 Are the indicators measurable?
3.5.2 Are the indicators achievable – at an anticipated cost?
3.5.3 Are the indicators relevant with regard to the objective level concerned
and do they cover it?
3.5.4 Are the indicators time-based (i.e. do they specify by when the result
is to be achieved)?

4. Sustainability – no sub grid

2007 Page 16

5. Budget and cost-effectiveness – no sub grid

The ranking of proposals in relation to the themes of proposals

The ranking of proposals, in both the Concept Note and the Full Application Form assessment phase, will be
carried out regardless of the themes, and will be based exclusively on the assessed quality of the proposals.

(4) STEP 4: VERIFICATION OF ELIGIBILITY OF THE APPLICANT AND PARTNERS

The eligibility verification, based on the supporting documents requested by the Contracting Authority (see
section 2.4) will only be performed for the proposals that have been provisionally selected according to their
score and within the available financial envelope.

• The Declaration by the applicant (Section VI of part B the grant application form) will be cross-
checked with the supporting documents provided by the applicant. Any missing supporting document
or any incoherence between the Declaration by the applicant and the supporting documents may lead
to the rejection of the proposal on that sole basis.

• The eligibility of the applicant, the partners, and the action will be verified according to the criteria
set out in sections 2.1.1, 2.1.2 and 2.1.3.

Following the above analysis and if necessary, any rejected proposal will be replaced by the next best placed
proposal in the reserve list that falls within the available financial envelope, which will then be examined for
the eligibility of its applicant and the partners.

2007 Page 17

2.4 SUBMISSION OF SUPPORTING DOCUMENTS FOR PROVISIONALLY SELECTED PROPOSALS

Applicants who have been provisionally selected or listed under the reserve list will be informed in
writing by the Contracting Authority. They will be requested to supply the following documents in
order to allow the Contracting Authority to verify the eligibility of the applicants and their partners:
1. The statutes or articles of association or Declaration /Contract of Establishment of a Company of the
applicant organisation5 and of each partner organisation. Where the Contracting Authority has recognized the
applicant’s eligibility for another call for proposals under the same budget line within 2 years before the
deadline for receipt of applications, the applicant may submit, instead of its statutes, copy of the document
proving the eligibility of the applicant in a former Call (e.g: copy of the special conditions of a grant contract
received during the reference period), unless a change in its legal status has occurred in the meantime.6

2. Copy of the applicant’s latest accounts and each partner organisation (the profit and loss account and the
balance sheet for the previous financial year for which the accounts have been closed for Ltd and
cooperatives; DOH template for crafts).

3. Legal entity sheet (see annex D) duly completed and signed by the applicant, accompanied by the
justifying documents which are requested therein. If the applicant has already signed a contract with the
Contracting Authority, instead of the legal entity sheet and its supporting documents the legal entity number
may be provided, unless a change in its legal status occurred in the meantime.

4. A financial identification form conforming to the model attached at Annex E, certified by the bank to
which the payments will be made. This bank must be located in the country where the applicant is registered. If
the applicant has already signed a contract with the Contracting Authority or where the Contracting Authority
has been in charge of the payments of a contract, a copy of the previous financial identification form may be
provided instead, unless a change in its bank account occurred in the meantime. In the case of local applicant,
bank account must be in local currency (kuna).

5. BON 2 of the applicant and each partner organisation not older then 30 days
6. Yearly financial report for small, medium and large enterprises (GFIPod) of the applicant and each
partner organisation for the fiscal year prior to this Grant Scheme.
7. Certificate, stating that the applicant and its person in charge is not having its affairs administered by the
courts in procedure issued by the Commercial Court not older then three months. The certificate is
requested for the applicant and each partner organisation.
8. Certificate, stating that the applicant and its person in charge is not having its affairs administered by the
courts in procedure issued by the Municipal Court not older then three months. The certificate is
requested for the applicant and each partner organisation.
9. Certificate proving lack of overdue obligations of the applicant and each partner organisation issued by
the Tax Administration not older then three months.
10. Excerpt from Court Registry or Central Crafts Registry of the applicant and each partner organisation.
11. Solemn statement signed by each partner eligible under 2.1.2 that the partner will not derive any profit
from the grant.
12. Statements by the applicant and each partner declaring the type and the amount of “de-minimis” aid
received during three fiscal years (2006, 2007 and 2008- until receipt of this grant), certified by the notary.7

5 Where the applicant and/or (a) partner(s) is a public body created by a law, a copy of the said law must be provided
6 To be inserted only where the eligibility conditions have not changed from one call for proposals to the other.
7 NB: The applicant must fully respect the “de minimis aid” provisions as specified in the Government Decree on publishing de
minimis rules (Official Gazzette, 45/2007)

2007 Page 18

13. Statement by the applicant about the planned distribution of grant amount in-between the applicant and
each partner individually, that will have the aim of verifying the respect for de-minimis rule, as specified in
Government Decree on publishing “de minimis” rules (Official Gazzette, 45/2007).

The supporting documents requested must be supplied in the form of originals or photocopies of the said
originals. However, the Legal entity sheet and the financial identification form must always be submitted in
original. Statements listed under number 12. have to be submitted in the form of the originals.

Where such documents are not in one of the official languages of the European Union or if they are not in
Croatian, a translation into English of the relevant parts of these documents, proving the applicant’s
eligibility, must be attached and will prevail for the purpose of analysing the proposal.

Where these documents are in an official language of the European Union other than English or Croatian, it is
strongly recommended, in order to facilitate the evaluation, to provide a translation of the relevant parts of
the documents, proving the applicant’s eligibility, into English. If the supporting documents are not
provided before the set deadline (15 calendar days from the receipt of the letter sent by the Contracting
Authority), the application may be rejected.

Based on the verification of the supporting documents by the Evaluation Committee it will make a final
recommendation to the Contracting Authority which will decide on the award of grants.

Supporting documents should be sent only after the written notification of the Contracting Authority.

NO supporting documents listed in section 2.4 should be sent together with the Application form.

2007 Page 19

2.5 NOTIFICATION OF THE CONTRACTING AUTHORITY’S DECISION

2.5.1 Content of the decision

Applicants will be informed in writing of the Contracting Authority’s decision concerning their application
and the reasons for the decision.
Applicants believing that they have been harmed by an error or irregularity during the award process may
petition to the Contracting Authority directly. The Contracting Authority must reply within 90 days of
receipt of the complaint.
Where the European Commission is informed of such a complaint, it must communicate its opinion to the
Contracting Authority and do all it can to facilitate an amicable solution between the complainant (applicant)
and the Contracting Authority. If this procedure fails, the applicant may have recourse to procedures
established under the recipient’s national legislation.

2.5.2 Indicative time table

DATE TIME*
Information meeting (if any)

To be announced8

Deadline for request for any clarifications from the 31 March 2008 16.00 CET
Contracting Authority

Last date on which clarifications are issued by the 10 April 2008 -
Contracting Authority

Deadline for submission of: Application Form] 21 April 2008 14.00 CET

Information to applicants on the opening & -
administrative check
23 May 2008*

Information to applicants on the evaluation of the 27 June2008* -
Concept Notes

Information to applicants on the evaluation of the 11 August 2008* -
Full Application Form

Notification of award (after the eligibility check) 1 October2008* -

Contract signature 14 November -
2008*
*
Provisional date. All times are in the time zone of the country of the Contracting Authority

8 The date and place of the information sessions on this call for proposals will be published on the internet at:
http://cfcu.mfin.hr/ (in section: Tender opportunities/ Phare 2006)
www.mingorp.hr
www.izvoz.hr
within 4 days of the launch of this call for proposals.

2007 Page 20

6 CONDITIONS APPLICABLE TO IMPLEMENTATION OF THE ACTION FOLLOWING THE
CONTRACTING AUTHORITY'S DECISION TO AWARD A GRANT

Following the decision to award a grant, the Beneficiary will be offered a contract based on the Contracting
Authority's standard contract (see Annex F). By signing the Application form (Annex A), the applicant
declares accepting, in case where it is awarded a grant, the Contractual conditions as laid down in the
Standard Contract.

Implementation contracts

Where implementation of the action requires the Beneficiary to award procurement contracts, it must award
the contract to the tenderer offering the best value for money, that is to say, the best price-quality ratio, in
compliance with the principles of transparency and equal treatment for potential contractors, care being taken
to avoid any conflict of interests. To this end, the Beneficiary must follow the procedures set out in Annex IV
to the contract.

2007 Page 21

3. LIST OF ANNEXES

DOCUMENTS TO FILL IN

ANNEX A: GRANT APPLICATION FORM (WORD FORMAT)

ANNEX B: BUDGET (EXCEL FORMAT)

ANNEX C: LOGICAL FRAMEWORK (EXCEL FORMAT)

ANNEX D: LEGAL ENTITY SHEET (EXCEL FORMAT)

http://ec.europa.eu/europeaid/work/procedures/index_en.htm

ANNEX E: FINANCIAL IDENTIFICATION FORM

DOCUMENTS FOR INFORMATION

ANNEX F: STANDARD CONTRACT (WORD FORMAT), available at the following address:

ANNEX G: DAILY ALLOWANCE RATES (PER DIEM), available at the following address:

2007 Page 22

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