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Evolution of Market price control mechanisms (COMPETE 2020)
Published on 30 May 2021
Portugal
This is the good practice's implementation level. It can be national, regional or local.
About this good practice
When preparing for the Programming Period 2014-2020 there was an effort in trying to assess the real costs of travel and training by analyzing hundreds of projects from the past programming period. The main problem was that most costs were capped, and as such, all results were false positives, because when SME’s submitted expenses which generally exceeded those caps, their eligibility was limited to those maximum costs.
In the present programming period, travel and training costs have maximum value per trip or per hour of training, and some of our calls, mainly those related to Vouchers, (including the I. 4.0 Voucher) had a maximum budget established (20.000€) which encompassed all the tasks needed to implement the project. These projects, had another singularity, as all of the suppliers were preselected from a database. Nonetheless, this was an outlier event, as normally there isn’t any preselection. R&D projects, for instance, have a dissimilar approach because the projects and their budgets are analyzed by experts using market references. Other control mechanisms being used are Public contracts, when applicable, using the best or lowest cost, considering a number of prerequisites as a criteria for selection. Finally, the last evolution is the use of simplified cost options as a control method, as these were defined using National and European statistical databases on market costs, defining a cost per unit (training hour, cost per trip considering distance intervals, etc.)
In the present programming period, travel and training costs have maximum value per trip or per hour of training, and some of our calls, mainly those related to Vouchers, (including the I. 4.0 Voucher) had a maximum budget established (20.000€) which encompassed all the tasks needed to implement the project. These projects, had another singularity, as all of the suppliers were preselected from a database. Nonetheless, this was an outlier event, as normally there isn’t any preselection. R&D projects, for instance, have a dissimilar approach because the projects and their budgets are analyzed by experts using market references. Other control mechanisms being used are Public contracts, when applicable, using the best or lowest cost, considering a number of prerequisites as a criteria for selection. Finally, the last evolution is the use of simplified cost options as a control method, as these were defined using National and European statistical databases on market costs, defining a cost per unit (training hour, cost per trip considering distance intervals, etc.)
Resources needed
Human resources.
Evidence of success
The best practice here is how “market prices control mechanisms” evolved and are being replaced in a lot of cost types by SCO (Simplified Cost Options). This is a “one size fits all” approach, which is less time consuming vs. price control mechanisms that are expensive in terms time, validation and not reliable, as for example consultancy fees may differ from region to region, while the work in question maybe similar.
Potential for learning or transfer
The potential for learning and transfer is accepting that market control mechanisms are subject to regional variations, which can lead to projects choosing to contract a less costly option either in consultant fees, travel costs, or training costs, sacrificing quality to obey perceived cost limits. Transitioning to simplified cost options is , on the other hand, a fairer way of effectively implementing a project, where the expense is not the object, but the unit of calculation. It may be difficult to apply SCO to Consultants fees, but when using national and European statistics, a median price per hour can be achieved, allowing for a fairer price to be defined. The main problem is verification and validation of the results of that work. E.g. a report might need to be evaluated by an expert’s panel, or specialists might need to verify if the certain type of reorganization was implemented on the factory floor. So, with SCOs, new needs arise for MA's: Training and specialization.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Organisation
COMPETE 2020 - Management Authority for the Competitiveness and Internacionality
Portugal
Área Metropolitana de Lisboa
Contact
Department Director