In October we reported that National Highways had begun the process of market engagement for its new Scheme Delivery Framework 2 (SDF2), which will replace its current Scheme Delivery Framework (SDF) and Pavement Delivery Framework (PDF), which are due to come to an end in 2027. The original £3.6 billion SDF saw 50 suppliers appointed including WSP, Jacobs, Kier, Amey, VolkerFitzpatrick, Morgan Sindall and Colas with, notably, 23% of the places taken up by SMEs.

Thursday’s SDF2 Commercial and Procurement Strategy webinar provided an excellent opportunity for National Highways to present a welcime update as to the progress of the programme, with speakers Neena Abdulla, Marshel Weerakone, Dion Farrell, Jake Hardwick and Matthew Charlesworth covering market engagement, lot allocation, the commercial and contracting model and procurement procedures respectively.

Starting with a rhetorical question, Abdulla said: “So what have we been doing since January? We’ve been locked away in meeting rooms, we’ve been having workshops and hackathons and we’ve been really taking all of your feedback and working through our commercial and procurement strategy. It’s been quite intense last few months but we have had our commercial and procurement strategy signed off internally and externally with our DfT and commercial Assurance board. Given us all your valuable input and feedback, we have now got our strategy approved.”

Abdulla insisted that SDF 2 has to be, first and foremost, flexible and agile.

“It’s primarily going to be used by operations, but there is provision in the framework to allow our capital delivery colleagues to use it for delivery of work as well. They will also be able to use this framework once it’s awarded,” she added.

The £14.5 billion, 8-year closed framework includes a break at six years in case government priorities change or the framework is no longer providing value.

As for the Contracting Model, Weerekone explained the logical thinking behind the 13 lots contained within Bands A-F (with traffic management allocated Band E), but one interesting revelation was worthy of note.

“Yoou will notice that technology isn’t in here,” he revealed. “Technology will not be will not be procured through SDF 2, and will be procured outside of it.”

Weerokone also spoke of the use of subcontractors:

“If you’re needing subcontractors to deliver the work, we’ll be expecting you to use the suppliers within SDF 2. If there is a valid reason why you can’t use the suppliers, then we will review that and allow those exceptions on a case by case basis. But for the most part, where there’s services and those services sit with an SDF, we’ll be expecting suppliers to be using those suppliers within the framework.

The other key change regarding the lotting model is you’ll see arrows going left and right and up and down from the bands and that is deliberate to denote that work can be subcontracted across the different lots and bands. Again, with the exception of Band E where we’ll be going directly to the Band E suppliers, the rest of it people can use the suppliers in the other bands for support on delivery.”

Finally, a word of caution for suppliers.

“Another key change that we’re making with SDF 2 is that we’re moving away from fixed allocation that we had in SDF 1 to a performance based allocation,” he said. “So what that means is we’re going to be assessing your performance scores over the year and then how well you perform will determine what impact that will have on your allocation.”

Matthew Charlesworth, Head of Commercial Delivery in operations across the South, but also currently SDF2 commercial lead, presented the commercial model that the agency is taking forward.

“The key features that we’ve adopted here is to move away from that one-size-fits-all approach that we had under SDF one, but also looking at some other features that can allow us to deliver that diverse portfolio that we have in RIS 3 and RIS 4,” he explained.

“There’s now a simpler contract that aligns with the trade practises that might be appropriate for those smaller suppliers or simpler schemes. We are adopting a tiered approach that recognises the novel nature of the schemes. This is where we’re looking at that single point of contracting for National Highways where we’ve got those mid-complexity schemes.”

In. terms of procurement and procedure, Jake Hardwick waded straight in with a noteworthy mention of new contract regulations.

“As many of you have been aware the Procurement Act 2023 came in to force on 24 February of this year, which replaced the old procurement regulations known as the PCRs or the Public Contracts Regulations. Within the PCRs there were five procurement procedures and these have been whittled down to two. One is the open procedure and the other is the competitive flexible procedure.

“For SDF2, we will be utilising the competitive flexible procedure as we believe this approach allows us to design bespoke procurement processes for each band under the framework. This ensures that we can proportionately allocate it makes the framework and the procurement process efficient and aligns with complexities of the works involved. When we conducted our extensive market engagement late last year, the feedback proved to us that this is the right one and is the most favoured by our supply chain.

“We’re very confident that this will enable us to tailor our approach to the complexities of each band,” he concluded, “supporting the SMEs that we want to involve as well and delivering value for a flexible, compliant and efficient process. So each tender will be evaluated using a weighted scoring model to ensure a balanced and transparent assessment process.

“SDF 2,” Hardwick continued, “will use the most sorry the most advantageous tender approach which combines 3 core components in commercial quality and social value. The addition of social value is a requirement for all in scope organisations such as National highways to include as part of their tender if they’re if the if it’s over a certain threshold.”

The honour of making the last presentation of the day fell to Dion Farrell, senior procurement advisor on SDF2.

“If you’re looking to supply goods or services to the public sector, it’s essential to understand the bidding and award rules under the UK Procurement Act 2023,” he insisted. “These changes are designed to level the playing field, making it easier f”or businesses of all sizes to compete and win public contracts. Understanding these rules can help you to position your business more effectively and increase your chances of success.”

Suppliers can apply individually or as part of a consortium or joint venture (JV), however there are strict limitations as Farrell set out.

“To ensure fairness and avoid conflicts of interest, suppliers cannot be members of more than one consortium or JV bidding for SDF 2. In addition to this, suppliers cannot apply both individually and as part of a consortium JV in the same lot or bands. For each lot where you express an interest, an associated company will be prevented from expressing an interest in the same lot.

“You cannot be an M&R provider in the same region as an SDF two general civils contractor and also there are no bidding restrictions on the suppliers tendering for the SDF 2 and M&R 2 frameworks. Therefore, suppliers can bid for both frameworks which is their commercial decision.”

As for bidding rules for Bands A to D, wuppliers cannot bid for both Band A (Main Contractor) and Band B (General Civils & Pavements). In addition, suppliers cannot bid for multiple lots in Band B and supplier cannot put a bid in for Lot 2 and Lot 3.

“Suppliers can bid for any number of lots except for restrictions relating to Bands A and B and it’s very important to note that suppliers must preference the lots and sub-lots they tender for which will be considered at the award stage,” added Farrell.

Suppliers awarded a place in band A, B, C, D or E can only be awarded one sublot in Band F (Specialists), and nurther to this, suppliers can be awarded a maximum of eight sub-lots across SDF 2, including contingency positions.

• A supplier can be awarded a regional sublot position and a contingency position in the same lot.
• A supplier can be awarded one place on the Lot 1 Main contractor National Lot.
• A supplier can be awarded up to two regional sublots in Lot 2, which is General Sybil’s drainage and concrete.
• A supplier can be awarded up to three regional sublots in Lot 3 pavements and the supplier can be awarded one place in Lot 5.1, which is technology design N Stroke South and the supplier can be awarded up to two regional sub lots in Lot 5.2 which is scheme design.

As for Bands E and F, remembering that E relates to traffic management, suppliers must preference the lots and sub lots they tender for which will be considered at the award stage. This helps streamline the evaluation and award process and ensures that suppliers are considered for them for their most preferred opportunities.

“Looking at band-specific award rules for E and F, suppliers awarded a place in bands A, B, C, D or E can again only be awarded one sublot in Band F (Specialists), suppliers can be awarded a maximum of eight sublots across SDF 2 including contingency positions and the supplier cannot be awarded a regional sublot position and contingency position in the same lot,” Farrell explains.

A supplier can be awarded up to three regional sub-lots in Lot 6A, and could be awarded up to four regional sub-lots in Lot 7A. Suppliers can be awarded up to four regional sub-lots in Lot 8 and the supplier could be awarded up to four regional sub-lots in Lot 9. In lot 10, a supplier can be awarded up to four regional sub-lots and a supplier can be awarded up to three regional sublots in Lot 11. Finally in lot 12A, a supplier can be awarded up to three regional sub-lots.

Farrell concluded:

“Suppliers must carefully consider their bidding strategy, especially when forming consortia or JVs. Band specific restrictions and award caps are in place to ensure a balanced and competitive procedure.”

Overall, the 12 June presentation webinar delivered a comprehensive commercial evolution aligned to RIS3’s scale and ambition. National Highways clearly acknowledges RIS2’s challenges and has shaped a more disciplined, risk-aware, and collaborative framework in SDF2. The commercial strategy’s success will depend on maintaining the consistent application – particularly fiscal governance, supply chain readiness, and proactive risk monitoring. If implemented faithfully, it has the potential to significantly improve delivery outcomes and public trust across the strategic road network for 2025–2030.