It is important that the CPAM reflects the full resource cost of the project in order to provide a deliverable benchmark against which to assess the preferred procurement route. The CPAM must be able to fully deliver to the intended output specification and must be based on realistic assumptions around the availability of capital funding.
The capital and operational costs used in the CPAM should reflect the full resource cost of the project under conventional procurement and must be capable of delivering the intended output specification.
In addition to these basic capital and operational costs, where upfront capital is not available the cost of public sector finance should also be included in the CPAM, most likely in the form of PWLB finance costs.
These costs should be included where they reflect the ultimate cash flow consequence for the Procuring Authority, even if these are not of a cash nature. Including these costs in the analysis facilitates a like-for-like comparison between private finance and the true cost of public sector procurement.