When compiling the CPAM all cost estimates should reflect the full resource costs of the project under conventional procurement and must be able to fully deliver to the intended output specification. The CPAM should reflect the same specification and timing which as the shadow bid model, while it is possible that cost bases may differ under different procurement options, the output delivered by the options should be the same. The CPAM should be updated during procurement for changes in timetable and specification to ensure that the comparison remains valid.
The key priority is that the analysis should be comparable, and as such should account for the opportunity cost or any assets already owned as well as any residual value accruing to the public sector under the option.
All costs and assumptions must be explicitly signed off by the procuring authority and should reflect empirical evidence and current market conditions. Basic Capital Costs
Capital Cost Inputs in the CPAM will include:
• Basic cost of capital assets, such as buildings, required for the project, including any fit-out costs required to convert an existing property to the required use. Enabling, works and decanting costs may be included to the extent that the private sector partner will be required to undertake these
• Full lifecycle costs of maintaining the assets in the condition required to deliver the output specification over the agreed concession period, including the costs of meeting hand back requirements
• Specific RPI / indexation on the above
• Specific risk uplifts and Optimism Bias (see section 5)
• Any capital receipts or capital contributions if included directly in a project will offset these amounts. In these circumstances, refer to separate guidance at: http://www.scotland.gov.uk/Topics/Government/Finance/18232/capinject