Yes. The European Commission treats all proposals received as confidential, as well as any related information, data and documents received from each applicant. The whole process of handling and evaluating proposals is carried out in compliance with strict confidentiality rules, and proposals are archived under secure conditions at all times.
Negotiating a potential project proposal will most probably involve exchanging important information, which can result in the disclosure of your ideas, know-how, plans or techniques. Ensuring that confidentiality obligations are duly put into place will allow you to safely disclose know-how and information which, although not protectable by IP rights, brings a commercial/economic/strategic value to your organisation.