Last updated:
Friday, 17 September 2021
For all capital expenditure, lease and asset disposal proposals that require Cabinet approval, the Better Business Cases two-stage approval process must be followed unless otherwise agreed with Cabinet or the Treasury.
Supporting ministerial decision-making rights
Cabinet has investment decision rights on all investment proposals where the investment requires new Crown funding or support, is High Risk or has significant policy issues. Cabinet must also be given the opportunity to consider investment proposals that have significant fiscal and policy implications or could affect the government's reputation in the marketplace.
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Cabinet documents setting out expectations and requirements are listed in Related external links below.
Two-stage Cabinet approval required
High Risk projects must follow the two-stage Cabinet approvals process. The purposes of this two-stage process are to:
- give ministers the opportunity to consider a long list of options before they’re discarded (to support ministerial choice of direction)
- confirm ministerial support before approaching the market (to maintain market confidence in government procurement)
Stage 1: Indicative Business Case. Decision-makers consider and approve:
- the preferred way forward (a short-list of options, based on analysis of a long-list)
- the project to proceed with more detailed assessment of the short-list options
- the project to engage with market suppliers through a Request for Information (RFI).
Stage 2: Detailed Business Case. Decision-makers consider and approve:
- the preferred option
- the project to proceed to formal market engagement through a Request for Proposal (RFP) or Request for Tender (RFT) process
- the project to finalise the arrangements for the successful implementation of the preferred option, through an Implementation Business Case.
Related requirements
Before starting work on a Business Case, a project assessed as high risk (through the Risk Profile Assessment moderation process) must complete:
- A Business Case Scoping document, to agree the Business Case approach, decision pathway, effort, and assurance requirements with their Treasury Vote Analyst, monitoring agency (if any) relevant functional leads and Te Waihanga – Infrastructure Commission:
- A Strategic Assessment, which justifies the need to invest in change and obtains (internal agency) approval to proceed to business case development.
Are you facing time pressure to submit an investment proposal?
When decisions need to be made rapidly for reasons outside agency control – for example in order to keep attractive options open, or because Cabinet is directing officials to expedite decisions, then the Treasury will work with you to help make it happen. Check the guidance below and contact your Treasury vote analyst immediately.
Expediting Investment decisions
Scope of the business case requirements
Use the table below when considering how to tailor the business case templates for your project.
| High Risk any scale | Non-high risk large scale | Non-high-risk Small scale | |
|---|---|---|---|
| Standard BBC pathway | Strategic Assessment Indicative Business Case Detailed Business Case Implementation Business Case |
Indicative Business Case Detailed Business Case Implementation Business Case |
Single-stage Business Case Implementation Business Case (if procurement) |
| Strategic fit | Investment Logic Mapping (ILM) with certified practitioner facilitator | ILM with trained facilitator | ILM not mandated |
| Monetary benefits and costs | National economy All significant resource flows, including non-monetary costs and benefits |
Organisation and selected sectors All significant resource flows that can be expressed in monetary terms |
Organisation |
| Non-monetary benefits and costs | Multi-criteria decision analysis using expert facilitation and proprietary tools required | Multi-criteria decision analysis | Ranking of non-monetary benefits and costs |
| Uncertainty | Quantitative risk analysis (QRA) required | Quantify risks and probabilities[1] | Single point adjustments of costs and benefits |
| Assurance | Fully costed assurance plan required Gateway reviews required |
Fully costed assurance plan required Gateway reviews available on request |
Assurance plan required Gateway reviews available on request |
Assurance
ICT-enabled state sector projects assessed as high risk must prepare costed assurance plans. Contact [email protected]
Assurance plans for high risk projects must include Gateway reviews. A Gateway Review is normally required as each stage of the Business Case (Indicative BC, Detailed BC, Implementation BC) nears completion. There is an 8-10 week lead time for contracts and logistics, so get in touch early: [email protected].
Treasury can facilitate Business case clinics for projects assessed as high risk. Clinics bring Treasury and other system leads together in one workshop to provide consolidated feedback on a business case under development. If you’re interested in requesting more information or requesting a clinic, please contact your Treasury Vote Analyst or Treasury IMAP investment advisor, or email [email protected]
Guidance
Indicative Business Case (IBC)
Detailed Business Case (DBC)
Implementation Business Case (ImBC)
< to BBC Pathways navigation diagram>
Note:
- [1] Consider risk modelling techniques that are less resource intensive than full quantitative risk analysis. For example, by using multi-point probability or decision-tree analysis to estimate the impacts of different outcomes on mid-point risk estimates.