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Grant Analysis

Purpose & Target

This grant aims to support the organisation of a technological challenge focused on human-AI dialogue systems. The main goal is to set up a testing environment and orchestrate evaluation campaigns for privacy-preserving AI systems that can handle classified defence information and justify their responses. - Target recipient type: Consortium of legal entities (public or private). - Target recipient size: No explicit size limits for the organising entity, but multi-beneficiary applications are mandatory. SMEs and mid-caps are encouraged to participate in cross-border collaborations. - Designation: SECTOR-SPECIFIC (Defence, Artificial Intelligence, Dialogue Systems). - Geographic scope: Organisations established in EU Member States and listed EEA countries. - Key filtering criteria: Focus on setting up and organising a technological challenge for human-AI dialogue systems in defence contexts, mandatory consortium, legal entity status, and establishment in eligible countries. - Grant frequency and context: This is a specific call under the European Defence Fund's annual work programme, part of a broader initiative to foster defence research and technological development through challenges.

Financial Structure

This grant is provided as a Lump Sum Grant for Research Actions (LS-RA), covering all eligible direct and indirect costs for the project.

Funding Rate: 100% of eligible costs.
Budget for this Topic: The maximum grant amount requested for this specific topic (EDF-2025-LS-RA-CHALLENGE-DIGIT-HAIDO) must NOT exceed EUR 7,000,000.
Eligible Costs: Costs are determined based on an estimated project budget that must comply with EU actual cost grant eligibility conditions. This includes:
Personnel costs: Eligible at average personnel costs (unit cost) and for SME owners/natural persons (unit cost).
Subcontracting costs: Work must be performed in eligible countries.
Equipment costs: Only depreciation is eligible.
Internally invoiced goods and services: Eligible at unit cost.
Indirect costs: A 25% flat-rate of eligible direct costs (excluding specific categories like subcontracting) or actual costs, chosen at the start and fixed for the project.
VAT: Non-deductible/non-refundable VAT is eligible, except for public bodies acting as public authorities.
Kick-off meeting costs: Eligible (travel for up to 2 persons, 1 night accommodation) if the meeting occurs after the project start date.
Project websites: Communication costs for presenting the project on participants' existing websites or social media are eligible; separate project websites are NOT eligible.
In-kind contributions: Allowed, but are cost-neutral (cannot be declared as cost).
Ineligible Costs:
Financial support to third parties is explicitly NOT allowed.
Costs related to the use of assets, infrastructure, facilities, or resources located or held outside eligible countries, even if their use is exceptionally authorised without funding.
Payment Schedule:
A prefinancing payment (typically 55% of the maximum grant amount) is normally received 30 days after the grant agreement's entry into force, start date, or provision of a financial guarantee (whichever is latest).
For projects longer than 18 months, additional prefinancing or interim payments may occur.
The final balance payment is calculated at the end of the project.
Prefinancing Guarantees: May be required, usually from the coordinator for the consortium, issued by an approved bank/financial institution in an EU Member State (or exceptionally from a non-EU country if equivalent security is offered). The amount is typically equal to or lower than the prefinancing.
Financial Compliance: Grants are subject to a 'no-profit rule', meaning the combination of revenues and EU grant should not exceed total costs. Double funding from other EU grants for the same cost items is strictly prohibited.

Eligibility Requirements

Organization Type and Legal Status

Legal entities (public or private bodies) are eligible.
Natural persons are NOT eligible, with the exception of self-employed persons (sole traders) where the company does not have a separate legal personality.
International organisations are NOT eligible, unless their members are exclusively EU Member States or EDF associated countries, and their executive management structure is located in an eligible country.
Entities without legal personality may exceptionally participate, provided their representatives can undertake legal obligations and offer guarantees for the protection of EU financial interests.
Associations and interest groupings may participate as 'sole beneficiaries' or 'beneficiaries without legal personality'. If members implement the action, they should also participate as beneficiaries or affiliated entities.
Subcontractors involved in the action and associated partners must comply with the same establishment and control conditions as beneficiaries.
Entities subject to EU restrictive measures or EU conditionality measures (e.g., Hungarian public interest trusts established under Act IX of 2021) are NOT eligible.

Geographic Location

All applicants (beneficiaries and affiliated entities) must be established in one of the eligible countries: EU Member States (including overseas countries and territories (OCTs)) or listed EEA countries.
Applicants' executive management structure must be established in eligible countries.
Organisations must not be subject to control by a non-associated third country or entity, unless they provide specific guarantees approved by the Member State or EDF associated country where they are established.
Subcontracted work must be performed in eligible countries.
Only infrastructure, facilities, assets, and resources located or held in an eligible country may be used. Exceptional use of other assets is possible if certain conditions are fulfilled and agreed upon by the granting authority, without receiving funding for them.

Consortium Composition

Mandatory: Proposals must be submitted by a minimum of 3 independent applicants (beneficiaries, not affiliated entities) from 3 different eligible countries.

Project Scope and Activities

The proposal's content must correspond wholly or at least in part to the specific topic description.
Mandatory activities for this topic: 'Integrating knowledge' (Article 10(3)(b) EDF Regulation) which includes: setting up testing infrastructure for human-AI dialogue systems, elaborating data annotation guidelines, collecting/annotating/distributing/curating databases, and organising evaluation campaigns (coordination with teams, managing test campaigns, debriefing workshops).
Optional eligible activities: 'Generating knowledge' (a), 'Studies' (c), 'Design' (d).
Ineligible activities include: projects not implementing EDF Regulation objectives; not concerning new/upgraded defence products/technologies; not relating to Article 10(3) EDF Regulation activities; not covering mandatory activities; concerning products prohibited by international law; concerning lethal autonomous weapons without meaningful human control (with exceptions for defensive systems); or where background/results are subject to non-associated third-country control/restriction (unless guarantees provided).
Financial support to third parties is NOT allowed.

Financial and Operational Capacity

Applicants must have stable and sufficient resources to implement the project and contribute their share. This includes having sufficient experience in projects of comparable size and nature.
A financial capacity check is generally performed for all beneficiaries, unless they are public bodies or the individual requested grant amount is not more than EUR 60,000.
Operational capacity is assessed based on the competence and experience of applicants and their project teams, including human, technical, and other operational resources. Public bodies are exempted from this check.

Ethical and Security Requirements

Projects must comply with the highest ethical standards and applicable EU, international, and national law.
An ethics review is required, and specific ethics rules may be applied.
Projects involving classified information must undergo security scrutiny. Information classified as TRES SECRET UE/EU TOP SECRET (or equivalent) cannot be funded. Facility Security Clearance (FSC) for premises and Personnel Security Clearance (PSC) for individuals with a need-to-know are required for handling classified information (CONFIDENTIEL UE/EU CONFIDENTIAL or SECRET UE/EU SECRET, or RESTREINT UE/EU RESTRICTED if national rules apply).

Application Process

Application Submission

Proposals must be submitted electronically via the Funding & Tenders Portal Electronic Submission System. Paper submissions are NOT accepted.
The application comprises:
Part A: Administrative information, filled directly online in the Portal.
Part B: Technical description, downloaded as a template, completed, and uploaded as a PDF. This part has a maximum limit of 100 pages (including work package descriptions), and any excess pages will be disregarded during evaluation.
Mandatory Annexes: Templates are downloaded, completed, and uploaded as PDFs (unless another format is specified). These include a detailed budget table/calculator, participant information, a list of infrastructure/facilities/assets/resources, actual indirect cost methodology declarations (if applicable), ownership control declarations (for beneficiaries, affiliated entities, subcontractors, and associated partners), and a PRS declaration (if access to Galileo PRS information is needed).
Part B and its annexes must be uploaded as a single password-protected ZIP archive (maximum 100 MB). The password must be sent separately to [email protected] before the submission deadline, along with the proposal ID and zip file name.
If your proposal involves classified information, you MUST NOT submit it online. Contact [email protected] well in advance for alternative delivery arrangements.
The submission deadline is 16 October 2025 – 17:00:00 CET (Brussels). The system closes automatically at this time, and no extensions are possible.
A confirmation email indicates successful submission. If not received, the proposal has NOT been submitted.

Pre-application Requirements

All applicants (beneficiaries and affiliated entities) must be registered in the Participant Register and validated by the Central Validation Service before submitting the proposal. This involves obtaining a Participant Identification Code (PIC).
Subcontractors involved in the action and associated partners also need to register for a draft PIC.
The coordinator must confirm that all applicants consent to participate and agree with the proposal's content. They must also confirm the information's correctness and compliance with EU funding conditions.

Project Implementation and Reporting

The expected project duration is 48 months. Longer durations are possible with proper justification and may be extended via amendment.
Project start date is typically after grant signature, but a retroactive start date (never earlier than the proposal submission date) may be granted exceptionally.
Mandatory deliverables include progress reports (every 6 to 12 months) and a 'special report' summarizing project results, basic principles, outcomes, benefits, and exploitation paths.
Milestones and deliverables are managed through the Portal Grant Management System.

Support and Assistance

Applicants are encouraged to find answers to questions in the Online Manual, Topic Q&A (on the Topic page), and Portal FAQ.
For IT-related questions, contact the IT Helpdesk.
For non-IT questions, email [email protected], clearly indicating the call and topic reference.

Post-Award Requirements

If selected, proposals enter a 'grant preparation' phase involving dialogue to fine-tune technical/financial aspects and address evaluation committee recommendations. Full compliance is a pre-condition for grant signature.
Various legal checks (entity validation, financial capacity, exclusion) are conducted before grant award.
Projects involving classified information will have a 'security aspects letter (SAL)' annexed to the Grant Agreement, detailing specific security rules.
A consortium agreement is highly recommended to manage internal arrangements, clarify grant money distribution, and facilitate dispute resolution among partners.
Beneficiaries are strongly advised to collectively agree to be the 'end-user' of any defence-related products used or generated by the action within the consortium, to simplify intra-consortium transfers and minimize the need for additional End-User Certificates (EUCs).

Evaluation Criteria

The evaluation of proposals for this grant focuses on several key areas, each contributing to an overall score. The maximum total score is 45 points, with an overall threshold of 30 points for a proposal to be considered for funding. For this specific topic, only the highest-ranked proposal will be funded. Excellence and Potential of Disruption (Weight: 2, Max: 5 points)

Quality of the overall concept and soundness of the proposed approach, including ideas, technologies, and methodology.
Compliance with the grant's objectives, scope, types of activities, functional requirements, and expected impact.
Degree to which the proposed project's objective and expected outcome are significantly different from (and strategically or operationally advantageous over) existing defence products or technologies, or show potential for disruption in the defence sector.

Innovation and Technological Development (Weight: 2, Max: 5 points)

Demonstration of innovation potential and the presence of ground-breaking or novel concepts (e.g., new products, services, business/organizational models), promising technological improvements, or new applications of technologies in the defence sector.
Integration of existing knowledge and previous R&D activities (defence and civil) while avoiding unnecessary duplication.
Potential for the developed innovations or technologies to 'spin-off' into other defence applications and products.

Competitiveness (Weight: 1, Max: 5 points)

Anticipated competitive advantage of the product/technology/solution compared to existing or planned solutions within the EU and globally, considering the balance between performance and cost-efficiency.
Potential to accelerate growth for companies across the EU, based on market analysis and expected sales volumes.
Strength of the Intellectual Property (IP) strategy (e.g., patents) supporting the competitiveness and growth of applicant companies.

EDTIB Autonomy (European Defence Technological and Industrial Base) (Weight: 1, Max: 5 points)

Contribution of the proposed project to increasing the EU's industrial and technological non-dependency from third countries.
Positive impact on the European security of supply, including the creation of new supply chains.
Alignment with defence capability priorities agreed by EU Member States within the Common Foreign and Security Policy (CFSP).

Creation of New Cross-Border Cooperation (Weight: 2, Max: 5 points)

Extent to which the project establishes new cross-border cooperation among legal entities in EU Member States or EDF associated countries, particularly SMEs and mid-caps, compared to previous activities in this technological area.
Description of planned future cross-border cooperation and opportunities created by the project.
Degree of substantial participation by cross-border SMEs and mid-caps, and the industrial or technological added value they contribute.

Implementation (Weight: 1, Max: 5 points)

Effectiveness and practicality of the work plan structure, including timing and inter-relation of work packages.
Usefulness and comprehensiveness of project milestones and deliverables, with clear, measurable, realistic, and achievable criteria.
Appropriateness of management structures and procedures, including decision-making mechanisms, for the project's complexity and scale.
Quality of risk management, including identification and assessment of critical risks and proposed mitigation measures.
Appropriateness of task and resource allocation among consortium members, ensuring valid and complementary roles for effective and efficient project execution.

Scoring Scale

0: Fails to address the criterion or insufficient information.
1: Poor; inadequately addressed or serious weaknesses.
2: Fair; broadly addressed but significant weaknesses.
3: Good; addressed well but some shortcomings.
4: Very Good; addressed very well but minor shortcomings.
5: Excellent; successfully addresses all relevant aspects, minor shortcomings.

Compliance & Special Requirements

Regulatory Compliance

Projects must comply with the EU Financial Regulation (2024/2509) and the European Defence Fund (EDF) Regulation (2021/697).
Adherence to EU policy interests and priorities, including environmental, social, security, industrial, and trade policies, is mandatory.
Projects must also respect EU values and the European Commission's policy regarding reputational matters.

Ethical Standards

Compliance with the highest ethical standards and research integrity is required.
All projects undergo an ethics review, and specific ethics rules may be imposed as part of the Grant Agreement, potentially requiring ethics deliverables.

Security Requirements

Projects involving classified information must undergo security scrutiny. Information classified as TRES SECRET UE/EU TOP SECRET (or equivalent) cannot be funded.
Handling of classified information (CONFIDENTIEL UE/EU CONFIDENTIAL or SECRET UE/EU SECRET, or RESTREINT UE/EU RESTRICTED if national rules apply) necessitates a valid Facility Security Clearance (FSC) for premises and Personnel Security Clearance (PSC) for individuals with a need-to-know.
Classified information handling must adhere to Commission Decision 2015/444 and its implementing rules.
Any subcontracting of tasks involving classified information requires prior written approval from the granting authority.
Potential security issues must be immediately notified to the granting authority.
Beneficiaries must ensure their projects are not subject to third-country/international organisation security requirements that could impede implementation or jeopardize the grant.

Intellectual Property (IP)

The Model Grant Agreement specifies rules regarding IP, including 'list of background' and 'background free from restrictions', 'results free from restrictions', 'ownership of results', 'protection of results', 'transfer and licensing of results', and 'rights of use on results'.
For EDF Research Actions, there are specific requirements for 'access to results for policy purposes' and 'access to special report', as well as 'access rights to further develop results'.

Cross-Cutting Themes and Strategic Alignment

The call contributes to the Strategic Technologies for Europe Platform (STEP) objectives, specifically in deep and digital technologies.
It aims to advance technologies through the organisation of technological challenges, particularly in AI and machine learning for objective and comparative performance measurement.
There is a strong emphasis on privacy-preserving human-AI dialogue systems for defence use cases.
Involvement of representative defence users is critical for defining use cases, testing demonstrators, and providing feedback.

Risk Management

Project proposals must include identification and assessment of project-specific critical risks, along with detailed proposed risk treatments and mitigation measures, which are evaluated under the 'Implementation' award criterion.

Other Specific Considerations

Business coaching services may be offered to successful SME beneficiaries, aiming to accelerate growth and guide them in accessing the defence market.
A consortium agreement is highly recommended to manage internal arrangements, distribute grant money within the consortium, and resolve potential disputes.
For intra-EU transfers of defence-related products, beneficiaries are responsible for ensuring compliance with granting authority rights. They are strongly advised to collectively agree to be the 'end-user' of defence-related products within the consortium to simplify transfers and reduce the need for additional End-User Certificates (EUCs).

Grant Details