What is a non-disclosure agreement (NDA) in the context of procurement?

• A. A clause that requires disclosure of all information.
• B. A contract that protects confidential information exchanged between parties.
• C. A warranty document.
• D. A pricing schedule.

Answer: (B)

In procurement, an NDA is a contract that protects confidential information exchanged between parties. It isn’t about requiring disclosure or being a warranty or pricing document. Its purpose is to ensure that sensitive data—things like technical designs, cost structures, business plans, or supplier evaluations—can be shared to evaluate and negotiate, without fear that the information will be leaked or misused.

Typically an NDA sets out what counts as confidential, who must keep it secret, how the information can be used, any exceptions (such as information already known or publicly available), how long the obligation lasts, and remedies if someone breaks the agreement. It can be mutual (both sides share confidential information) or unilateral (one side discloses information).

A practical picture: a buyer shares detailed specifications with a potential supplier to assess feasibility. Signing the NDA allows that honest, in-depth exchange to occur while legally protecting the information from unauthorized disclosure or use.