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Guide

NDAs before
a sourcing event

Running an event usually means sharing a specification with several suppliers, some of whom you have never worked with. The confidentiality step is straightforward and it is where most events lose their first week.

Guide6 minute readWritten for procurement and finance teams

A sourcing event needs suppliers to see a real specification, and a real specification usually contains things you would rather competitors did not have.

So an NDA goes out first. Six suppliers, six agreements, each at a different stage, and by the time the last one signs the event has slipped a fortnight.

The delay is administrative rather than legal. Almost every NDA is agreed eventually, and the negotiation involves the same handful of requests.

Why it holds events up

Because six documents in six inboxes is a tracking problem, and tracking problems expand to fill whatever attention they are given.

Somebody has to know which suppliers have signed, which are negotiating, which have not replied, and which asked for a change nobody has answered. Doing that by email means the answer to any of those questions is that somebody would have to check.

Attach it to the event

Rather than sending an NDA to each supplier separately, attach it to the procurement itself. Every invited supplier receives the same agreement, negotiates their own copy, and their stage is visible against the event.

This changes the question from a search to a glance. Anybody looking at the event can see who has signed and who has not, without asking.

Worth noting the constraint that goes with it. An NDA should follow one route or the other, either direct to a single supplier or attached to a procurement. Doing both creates two versions of the same agreement that drift apart, and eventually somebody signs a version nobody else did.

What suppliers ask for

The same five things, in roughly this order of frequency.

RequestHow commonUsual position
Shorter termVery commonUsually fine, check it covers the likely engagement
Carve out for pre existing knowledgeVery commonStandard and reasonable
Make it mutualCommonOften fine, particularly if they are sharing anything
Narrower definition of confidentialOccasionalDepends, check it still covers what matters
Governing law changeOccasionalWorth a legal view rather than a quick yes

The first three account for most redlines and can usually be decided without legal involvement, provided somebody has set the position in advance.

Deciding quickly

The single biggest speed improvement is agreeing your positions before the event rather than during it. If procurement already knows that a three year term is acceptable and a pre existing knowledge carve out is standard, most redlines can be answered the same day.

Reserve legal involvement for the requests that genuinely need it, which is usually liability and governing law rather than term length.

Handling redlines as individual change requests rather than as a marked up document helps here, because each one gets a decision rather than the whole document going back for review.

Reusing a signature

A supplier who has signed your NDA should not sign it again for the next event. Storing the signed agreement against the supplier record and reusing it removes the whole exercise for anybody you have worked with before.

Over time this means events start faster, because a growing share of your invited suppliers are already covered.

Mistakes worth avoiding

Sending it after the specification. Obvious once stated, and it happens.

No named decision maker. If redlines have no owner, they sit. Name somebody before the event opens.

Treating every request as legal. Term length does not need a lawyer if the position is already agreed.

Losing track of who signed. The reason to attach it to the event rather than manage six threads.

In short

What to take away from this

Attach the NDA to the procurementSix threads becomes one view with a stage against each supplier.
One route, not bothDirect to a supplier or attached to an event, because two versions drift apart.
Agree your positions in advanceMost redlines can then be answered the same day.
Three requests cover most redlinesTerm length, pre existing carve out and making it mutual.
Reserve legal for liability and governing lawTerm length rarely needs a lawyer.
Reuse the signatureA supplier who signed before should not sign again.

Bring an NDA that is stuck

We will run it through the stages on the call, including a change request.

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