Negotiations, and especially Non-Disclosure Agreements (NDAs) are rarely mere formalities. These documents, often dismissed as boilerplate legal clutter, are in fact powerful tools of strategic procurement. Particularly in sectors like public-private partnerships (PPPs), technology, and pharmaceuticals, NDAs can dictate the tempo, scope, and transparency of entire deals.
Yet, beneath their clinical language lies a potent duality. They can protect intellectual property and competitive advantage, or suppress whistleblowers, stall innovation, and obscure public accountability.
Procurement’s Silent Currency: Evaluating the Cost of Secrecy
In high-stakes negotiations, procurement professionals are not just selecting goods or services, they’re managing risk. NDAs become essential instruments in that equation. They’re not just legal shields, they’re risk transfer tools.
Strategic Considerations in NDA Procurement Include:
- Reputational Risk: In public-private contracts—especially in health, defence, and infrastructure, NDAs can prevent damaging disclosures. But overuse can attract scrutiny. In the UK, the NHS has faced criticism for NDAs linked to clinical whistleblowing, prompting parliamentary debate on ethics and transparency.
- Financial Exposure: Leaks around pricing models or proprietary methods (e.g., AI algorithms in healthcare tech) can erode competitive edge. Procurement teams often assess whether a breach could lead to litigation or market loss, and negotiate NDA clauses accordingly.
- Scope and Duration: A tightly scoped NDA can limit legal exposure. However, poorly defined ones may backfire—either too weak to protect key assets or so broad they verge on unenforceable.
Procurement teams often collaborate with in-house counsel to tailor NDAs that are enforceable across jurisdictions, especially in international or joint venture contexts, where regulatory standards differ.
The Ethics of Silence: Innovation vs Suppression
NDAs are intended to protect confidentiality. But when wielded carelessly—or maliciously—they can actively stifle dissent and progress.
- In Tech: A notable example is the use of NDAs in Silicon Valley to suppress internal reports on algorithmic bias and discrimination. While framed as protecting trade secrets, such NDAs have been criticised for silencing engineers concerned with public safety and fairness.
- In Pharma: Clinical trials are another flashpoint. Pharmaceutical companies may require researchers and CROs (contract research organisations) to sign NDAs that prevent disclosure of trial anomalies. This can have profound implications on drug safety reporting, particularly when adverse effects are downplayed until after commercial release.
The UK’s own Freedom to Speak Up initiative, launched in response to whistleblower suppression in the NHS, acknowledges how legal instruments like NDAs have created a culture of fear. The ethical line is thin: protecting R&D is valid. Preventing accountability is not.
When NDAs Distort Markets: Case Studies
Some of the most notorious NDA abuses reveal just how much influence these documents wield:
The Carillion Collapse (UK, 2018)
Carillion, the construction and facilities management firm, had NDAs in place with subcontractors and government bodies. These limited early disclosure of cash flow problems and contractual risks. When the company collapsed, it triggered losses across the public sector and left thousands unemployed. MPs later condemned the “culture of secrecy” enabled by contractual terms, including NDAs.
Theranos (USA, 2015–2018)
While not UK-based, the Theranos scandal remains a textbook example of NDA misuse. Employees and investors were bound by aggressive NDAs, which prevented internal whistleblowing for years. By the time the fraud was publicly exposed, investors had lost millions and public trust in biotech startups was shaken.
NHS Gag Orders
Between 2013 and 2019, multiple NHS Trusts were found to have included “gagging clauses” in NDAs with departing staff, contrary to public sector transparency expectations. In 2013, then Health Secretary Jeremy Hunt condemned the practice, leading to revised guidance limiting their use.
NDAs as Tools of Power
In procurement, the NDA is not just a protective cloak—it’s a scalpel. When deployed with surgical precision, it can preserve innovation, secure supply chains, and enable trustworthy collaboration. When misused, it becomes a veil of silence over failures, fraud, and systemic flaws.
For procurement specialists, the challenge lies in balancing commercial confidentiality with ethical duty. This means scrutinising not just what NDAs hide, but what they reveal about the culture of those requesting them.
Sources:
Theranos Case: US SEC Litigation Release No. 24001, March 2018
“Freedom to Speak Up” Review (UK Department of Health, 2015)
