The background to the complaint

1. The complaint concerns alleged errors made by the European Institute of Innovation and Technology (EIT) in relation to a call for proposals. In 2009, the EIT launched a call for proposals entitled Knowledge and Innovation Communities (EIT-KICS-2009) (hereafter the 'Call'). The complainant, acting in cooperation with other cities and regions, submitted a proposal entitled "I'Cities - Information et technologie de la communication pour des villes intelligentes et durables." The complainant's proposal was not selected. The complainant appealed this decision before the EIT's Redress Committee. The Redress Committee confirmed the initial decision.

2. The complainant then turned to the Ombudsman.

The subject matter of the inquiry

3. The complainant alleged that the EIT wrongly rejected the I'Cities proposal because of the participation of public bodies in it.

4. The complainant claimed that the EIT should reconsider its decision as regards the I'Cities proposal and either launch a new call for proposals for the creation of a Knowledge and Innovation Community (KIC) or agree to fund the I'Cities proposal.

The inquiry

5. On 22 September 2010, the complainant addressed its concerns to the Ombudsman. On 25 October 2010, the Ombudsman opened an inquiry and forwarded the complaint to the EIT, which sent its opinion to the Ombudsman on 1 March 2011. The opinion was forwarded to the complainant, which submitted observations on 13 April 2011.

The Ombudsman's analysis and conclusions

A. Alleged wrongful rejection of the I'Cities proposal and related claim

Arguments presented to the Ombudsman

6. In its complaint, the complainant argued that the I'Cities proposal was rejected because it involved the participation of public bodies. The complainant referred to the following comment of the Evaluation Committee: "participation of public bodies (e.g. risk of political influences becoming a barrier to the development of activities)". The complainant stated that, according to Article 2 of Regulation No 294/2008[1], which created the EIT and defined its working principles, "partner organisation means any organisation which is a member of a KIC and may include in particular: higher education institutions, research organisations, public or private companies, financial institutions, regional or local authorities, foundations". Similarly, the Call stated that "governments at local, regional and national levels" were key partners of the EIT. The complainant argued that the decision to base the exclusion of the I'Cities proposal on the fact that it involved the participation of public bodies was clearly an act of maladministration and discrimination, and constituted a "major political error".

7. The complainant stated that it had asked the Redress Committee to reconsider the conclusions of the panel of experts. However, the Redress Committee found no evidence that the participation of public bodies was viewed as a negative factor. It noted that the Evaluation Committee considered that it was a positive factor and that the complainant took the evaluators' comment on this aspect out of context. The participation of public bodies was only one of four aspects which the evaluators considered would need further attention. The Redress Committee therefore considered that the participation of public bodies "was not a decisive factor for excluding the proposal". The complainant inferred from this statement that the Redress Committee held that the participation of public bodies "was a factor for excluding the proposal", albeit not a "decisive factor."

8. In its opinion to the Ombudsman, the EIT stated that the criteria for the selection of the KICs were indicated under point 5 of the Call, entitled "Overview of eligibility and evaluation procedures" and were identified in accordance with Articles 13.2 and 18.2 of Regulation 294/2008 and following a Governing Board decision of 20 February 2009. In the evaluation summary report, and during the evaluation process, it is clear that the I'Cities proposal was evaluated in line with the criteria set out in the Call and was not rejected because of the participation of public bodies in it. The evaluation was carried out by panels (one for each priority area) of independent experts (five experts per panel) and included the following five different stages:

(1) Eligibility criteria

The twenty proposals were checked against the following eligibility criteria:

- the proposal must be submitted before the deadline;

- parts A, B, C and D of the proposal must be completed;

- the combined length of parts B and C may not exceed 40 pages;

- part D must contain the signed declaration, endorsing the proposal and confirming the absence of a situation which could lead to exclusion, from the legal representative of every partner listed in part A;

- the proposed KIC must contain at least three independent partner organisations established in at least three Member States;

- the majority of the partner organisations must be established in the Member States;

- the proposed KIC must include at least one higher education establishment and one private company.

Only proposals satisfying all of the eligibility criteria were further considered. 18 proposals out of 20 were retained for evaluation.

(2) Initial go/no-go assessment

The experts were asked to assess the consistency of the proposals with the targeted priority area and broad innovation goals, namely, the degree to which the KIC addressed the priority area in a competitive and sustainable way. The 18 proposals received a "Go" decision.

(3) Step 1 - Evaluation of the quality of the proposed work programme and business plan

Parts A and B of the "Go" proposals were assessed against the following criteria:

• Novelty and attractiveness of the proposal;

• Economic, environmental, societal and innovative impact of the KIC in the context of European challenges and policies and its potential to make a major contribution to the aims of the EIT;

• Internal coherence of the KIC strategy and activities:

- completeness of the partners' tools and resources and the level of integration between partners to form the innovation chain,

- provisions for innovation activities and investments, including measures involving private and financial sectors, SMEs, start-ups and spin-offs and new partners,

- extent to which the technological and non-technological research is innovation-driven, of high quality and with the potential to make a major impact,

- relevance and consistency of the education plan to KIC objectives;

• Quality of the co-location plan

- completeness and complementarity of KIC co-location centres,

- plan of operation: within each co-location centre and between co-location centres and the other partners in the partnership,

- people management in respect of co-location;

• Planning for the management and use of intellectual property

- effectiveness of the intellectual property right plans, including transfer, licensing and industrial value creation, and consistency with KIC objectives,

- mechanisms to promote innovative research and creativity, including remuneration and reward schemes;

• Completeness and credibility of the KIC business plan

- market analysis and competitive benchmarks,

- completeness and credibility of the financial plan including the identification of responsible actors, short-/medium-/long-term milestones, key performance indicators (KPIs) and sensitivity analysis (risk-assessment),

- potential of the KIC in terms of innovation added value, such as new business creation through spin-outs and within established companies, licensing and creation of societal impact, for example job creation or other contributions to the improvement of people's lives,

- potential return on investment over a 10-year period, including financial and non-financial indicators;

• Quality of the plans for dissemination of best practice and public outreach activity

- effectiveness of plans for external dissemination of best practice and excellence in the innovation sector, including education plans and programmes,

- effectiveness of public outreach.

Under Step 1, the experts gave positive feedback to the I'Cities proposal. In particular, under the assessment of the "Economic, environmental, societal and innovation impact of the KIC in the context of European challenges and policies and potential to make a major contribution to the aims of the EIT" criterion, the experts stated that "the strong involvement of public institutions could prove to be supportive".

In addition to the assessment of the specific criteria, the experts' panel provided the following comments: "This is a strong proposal, with high level of consistency and commitment from [a] wide range of relevant partners. There are several innovative ideas concerning the governance structure, and a solid presentation of IP and dissemination plans.

Should this proposal be retained as KIC, the following aspects may need to be further addressed:

- smooth functioning of the KIC, based on an agreement on common understanding and vision, and with a strong financial commitment from participating partners

- participation of public bodies (e.g. risk of political influences becoming a barrier to the development of activities)

- business creation and development

- measurement of multiplication effects on the economy."

The EIT explained that the participation of public bodies was referred to as only one of the aspects that may have needed to be addressed if the proposal was to be designated as a KIC. Thus, it was not part of the evaluation. In fact, the participation of public bodies did not prevent the I'Cities proposal from being among the five highest-scoring proposals for its priority areas and passing to the next stage of the evaluation.

(4) Step 2 - Evaluation of the commitment, capability and combined strength of the partners involved

Part C of the proposals was assessed against the second set of criteria:

• Management, governance and organisation of the partnership and co-location, covering also financial and legal aspects of the KIC:

- suitability of the legal and financial structure: the proposal must demonstrate that the structure fully supports the aims of the KIC,

- appropriateness of the organisation and management including key people profiles and time commitment in order to enable the KIC to function as an integrated entity,

- degree to which the governance structure supports clear and timely decision-making within the KIC.

• The combined strength of the partners

- the strength of the KIC in terms of capability and capacity of the partners in the fields of higher education, research, innovation and entrepreneurship,

- the strength and track record of partners' existing experience within the innovation chain,

- the commitment of the partners to integrate activities and resources within the KIC,

- the coherence of the partners' collaboration to form a world-class innovation chain closely linking all activities from education through to economic and societal impact.

After the assessment under Step 2, the panel drafted a summary report for each proposal combining the results of the previous stages. The final score was the sum of steps 1 and 2. The top three ranked proposals from each panel were reviewed by the final panel. The I'Cities proposal was not among the three highest-scoring proposals.

(5) Assessment by a final selection panel

A final panel examined the three highest-scoring proposals from each priority area together with their associated evaluation reports. The final panel was asked to:

- adjust, if necessary, the final scores to ensure consistency between the three priority-area evaluation panels;

- make recommendations concerning the selection of the designated KICs; and

- make recommendations concerning the way in which the selected proposals need to be improved or strengthened.

The outcome of this stage was the preparation of a report for the EIT Governing Board.

9. The EIT concluded that the involvement of public institutions was considered to be a positive aspect of the I'Cities proposal. The reference to the participation of public bodies was only made in the context of the general comments made under Step 1. The EIT pointed out that these comments did not prevent the I'Cities proposal from progressing to Step 2 of the evaluation process. It thus considered that the case should be closed.

10. In its observations, the complainant noted a contradiction between two statements made by the EIT about the evaluation of the I'Cities proposal. It first stated that the participation of public bodies is a positive element. It then went on to state that this participation poses a risk of political influence becoming "a barrier to the development of activities". The complainant concluded that the participation of public bodies was not considered to be a positive element. Contrary to what the EIT stated, the complainant believed that this element must have been taken into consideration during Step 2 of the evaluation process, when the I'Cities proposal was rejected.

11. The complainant further noted that the EIT reply did not refer to the following comment made by the Redress Committee: "In the light of the above, the Committee considers that the "participation of public bodies" was not a decisive factor for excluding the proposal." This comment shows that the participation of public bodies was considered to be a negative factor. The complainant stated that it goes against fundamental rights and principles to consider that the participation of public bodies might lead to a situation where political influence becomes a barrier to the development of activities.

The Ombudsman's assessment

12. After carefully examining the summary evaluation report, the decision of the Redress Committee and the EIT opinion, the Ombudsman takes the view that the EIT considered the I'Cities proposal to be a good proposal and that the participation of public bodies was seen by the EIT as a positive element. His view is based, in particular on the following comments made in the summary evaluation report:

"The strong involvement of public institutions could prove to be supportive".

"This is a strong proposal, with high level of consistency and commitment from [a] wide range of relevant partners. There are several innovative ideas concerning the governance structure, and a solid presentation of IP and dissemination plans".

The Ombudsman also notes the following comment made by the Redress Committee, "The evaluators cite the presence of public bodies as a positive aspect of the proposal..."

Finally, in its opinion, the EIT stated the following:

"[I]t is clear that the I'Cities proposal ... was not rejected due to the participation of public bodies"

"Under Step 1, the experts gave a positive feedback to the I'Cities proposal."

13. The Ombudsman's view that the I'Cities proposal was seen as a positive factor is confirmed by the fact that the participation of public bodies was considered under Step 1 of the evaluation procedure, which the complainant's proposal passed. It was among the five highest-scoring proposals.

14. The complainant argues that the participation of public bodies was considered as negative during Step 2 of the evaluation procedure. The Ombudsman finds no element in the summary evaluation report to confirm this view. During Step 2 of the procedure, no reference was made to public bodies.

15. The Ombudsman therefore concludes that there has been no maladministration as regards the allegation. The related claim cannot therefore be sustained.

16. The Ombudsman recognises, however, that the panel of experts and the Redress Committee made statements which were worded poorly and which, therefore, could be misunderstood.

17. The summary evaluation report read as follows:

"Should this proposal be retained as KIC, the following aspects may need to be further addressed:

- Smooth functioning of the KIC, based on an agreement on common understanding and vision, and with a strong financial commitment from participating partners

- Participation of public bodies (e.g. risk of political influences becoming a barrier to the development of activities)

- Business creation and development

- Measurement of multiplication effects on the economy"

The Ombudsman understands that, when the panel of experts drew up this list, its intention was to draw attention to 1) the positive aspects of the project and 2) the manner in which these positive aspects could further be strengthened[2]. In sum, the above statement can only be understood as an encouragement to strengthen the participation of public bodies. It was not intended to criticise the participation of public bodies, and should not have been understood to constitute such a criticism.

18. The Redress Committee decision, however, states that: "the Committee considers that 'the participation of public bodies' was not a decisive factor for excluding the proposal." This poorly worded statement led the complainant to believe that, even though the participation of public bodies was not a decisive factor for excluding the proposal, it was not considered to be a positive factor for evaluating the proposal. The Ombudsman concludes that the communication to the complainant was poor and led it to believe that its proposal was rejected because of the participation of public bodies. According to the European Code of Good Administrative Behaviour, the information communicated by institutions should be clear and understandable[3]. The Ombudsman will therefore make a further remark below.

B. Conclusions

On the basis of his inquiry into this complaint, the Ombudsman closes it with the following conclusion:

There has been no maladministration by the EIT as regards the allegation and the related claim.

The complainant and the EIT will be informed of this decision.

Further remark

The Ombudsman draws the EIT's attention to the need to provide accurate, clear and understandable information about its reasons for rejecting proposals.

 

P. Nikiforos Diamandouros

Done in Strasbourg on 8 September 2011

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[1] Regulation (EC) No 294/2008 of the European Parliament and of the Council of 11 March 2008 establishing the European Institute of Innovation and Technology, OJ 2008 L 97, pp. 1–12.

[2] For example, it would not make sense to consider that, when citing "the smooth functioning of the KIC" (the first aspect) and "business creation and development" (the third aspect) as aspects that need to be further addressed, the panel of experts, in fact, held the view that these were aspects to be criticised.

[3] Article 22 of the European Code of Good Administrative Behaviour states the following: "The official shall, when he has responsibility for the matter concerned, provide members of the public with the information that they request. When appropriate, the official shall give advice on how to initiate an administrative procedure within his field of competence. The official shall take care that the information communicated is clear and understandable."