Sensitivity analysis involves the consideration of the effect on the project's net present value if the assumptions made turn out to be incorrect.
Where practical (after the final bids have been received) the analysis should be used to identify the changes in assumptions which would result in bids exceeding the CPAM.
Another key objective of sensitivity analysis is to establish the relative degree of firmness that should be attached to the central estimate of the net present value that has been produced. (It is not the objective of sensitivity analysis to produce a forecast of how likely it is for the outturn to be within a certain range.)
There are a number of more sophisticated techniques which can be employed to carry out further assessment of the combined project risk, such as Monte Carlo Simulation. These techniques can be costly whether carried out by an Authority's own economists, accountants or statisticians or by external consultants. There must be good reason for undertaking sophisticated analysis - it will not be necessary for every project.