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When is a two-stage Better Business Cases™ process required?

The two-stage business case process was introduced in direct response to complaints from ministers that agencies were presenting business cases for approval that did not consider a range of possible solutions but were designed to support a decision the agency had already made (“decision-based evidence-making”). The two-stage approach was included in Better Business Cases in August 2010.

The two-stage process applies to government departments, Crown entities and all other agencies in scope of Cabinet Office Circular CO(19)6 : Investment management and asset performance in the state services.  It must be followed for all capital expenditure, lease and asset disposal proposals that require Cabinet approval, unless otherwise agreed with Treasury.

Stage 1: Based on the Programme (or Indicative) Business Case; decision-makers consider and approve:

  • a preferred way forward (short-list of options)
  • 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: Based on the Detailed Business Case; decision-makers consider and approve:

  • a preferred option from the previously identified preferred way forward
  • the project to develop and finalise the arrangements for the successful implementation of the preferred option
  • the project to proceed to formal market engagement through a Request for Proposal (RFP) or Request for Tender (RFT) process.

The two-stage Cabinet approvals process:

  1. Respects Ministerial/Cabinet choice and provides three off-ramps:
    • starts with high-level analysis of a long-list of options; seeks approval-in-principle for a preferred way forward and a short-list for further analysis (Programme BC or Indicative BC)
    • more detailed analysis and recommendation of a Preferred Option; seeks approval to formally approach the market for the preferred option (Detailed BC)
    • confirmation of cost and plans before funding is appropriated; seeks approval to implement (Implementation BC).
  2. helps agencies avoid doing too much work too early, by providing Ministers/Cabinets with off-ramps at appropriate points
  3. maintains supplier market confidence
    • avoids putting suppliers to significant work writing proposals before Cabinet confirms its willingness to consider an investment, with a broad understanding of preferred option, costs and benefits.


Projects that do not require Cabinet approval may use the Single-Stage Business Case (normally those that are not high risk and with a whole-of-life-cost of under $25m), which combines the content of the Indicative and Detailed business cases at a lighter level and does not require Stage 1 approval.

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Last updated: 
Friday, 26 March 2021