1.86 Lifecycle Costs under the Conventional Procurement Option can depend not on need but on the availability and deployment of public capital to support wasting assets. Historically, Lifecycle Costs under the Conventional Procurement Option have been introduced less frequently than have been required and at a level that has not returned an asset to its original quality. This has, in turn, lead to poorer VfM for the public sector.
1.87 The frequency and magnitude of Lifecycle Costs will tend to vary from sector to sector and perhaps, from project to project. The Input Values ascribed to the Spreadsheet should be determined in the light of either project-specific or sector-specific experience. Lifecycle Costs are represented in the Spreadsheet as a percentage of initial Capital Expenditure, after adjusting for Optimism Bias. The quantum of Lifecycle Costs is an Input Value to be determined by Procuring Authorities.
1.88 Table 1.G sets out some of the sources of information that Procuring Authorities might use to help them make judgements on the appropriate level of Lifecycle Costs. The Input Value should be based on past evidence of lifecycle investment for both the PFI and Conventional Procurement option. It should not represent the ideal, but rather the reality.