What is a Phase Gate (Stage Gate)?
A phase gate is a formal checkpoint at a phase's end where governance reviews performance and the business case, then decides: continue, continue with changes, hold, or kill. Gates exist to stop zombie projects — work that keeps consuming money only because nobody formally asked whether it still should.
The gate review compares the project against its business case, not just its schedule. On the exam, killing a project at a gate because the business case died is a success of governance, not a failure of the project manager.
Worked example
After front-end engineering, a mining company's gate review finds capex estimates up 40% and commodity prices down. The project is technically on schedule — and the gate kills it anyway, saving the $700M construction phase. Painful meeting; excellent decision.