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Is subcontracting between partners allowed in Horizon Europe?

No, subcontracting between partners is not allowed in Horizon Europe nor in Horizon 2020 projects. According to the Annotated Model Grant Agreement of Horizon Europe, subcontracting between beneficiaries is not allowed in the same grant. All beneficiaries contribute to and are interested in the action; if one beneficiary needs the services of another in order to perform its part of the work it is the second beneficiary who should declare the costs for that work. (page 54, Art. 6.2 B ).

The explanation is related to the fact that invoicing between partners is not allowed within the framework of a Horizon Europe project as explained in this article. Purchases between beneficiaries are in principle not accepted. If a beneficiary needs supplies from another beneficiary, it is the latter beneficiary that should charge them to the action as cost. (Otherwise there is the risk that the grant is used to charge commercial profit margins.) Purchases between beneficiaries will only be accepted in exceptional and properly justified cases (e.g. beneficiary A is the usual supplier of beneficiary B for a generic consumable that beneficiary B needs for the action).

Subcontractors do not become party to the Grant Agreement (do not sign the GA), but they often implement important parts of the action. Therefore, the Grant Agreement mentions them and defines their role (rights and obligations) (page 103, Art. 9.3).

Subcontracting: beneficiaries/affiliated entities may NOT subcontract tasks to other beneficiaries/affiliated entities (page 13, General Preamble).