The Government has announced on 15 October 2021 that the Sovereign Industrial Capability Priority Grant and Capability Improvement Grant programs have now closed for applications for the 2021-22 financial year. For more information read the media release.

Capability Improvement Grant

If the Centre for Defence Industry Capability (CDIC) recommends improvements for your business, you can apply for a grant to help make the improvements.

Application detail:
You must apply within 12 months of receiving a CDIC advisory or facilitation service.

What do you get?

A grant of $4,000 to $240,000 to reimburse you for up to 80% of the cost of engaging a consultant or expert to implement recommended business capability improvements.

There is no limit to the number of grants your business can receive, but your total grant funding is capped at $240,000 in a 3-year period.

Who is this for?

Small to medium sized businesses that have, or are developing, products or services that can be applied to defence. Your business must have received a CDIC advisory or facilitation service.

Other eligibility requirements apply.


A business can apply for a Capability Improvement Grant to cover up to 80% of the cost of engaging a consultant or expert to implement business improvements. As part of their grant application the business must include a proposal and quote from a service provider.

The business improvements will be set out in an advisory services report provided to the business by the CDIC. 

As a potential service provider, your proposal and quote should:

  • align with the recommendations outlined in the CDIC’s advisory services report
  • clearly set out the objectives, purpose and expected benefits you intend to deliver as part of the Capability Improvement Grant project

How it works

You need to contribute 20% of the eligible project value.

To apply for a Capability Improvement Grant your business must first receive a CDIC advisory or facilitation service. Your adviser will assess your business and may recommend business capability improvements. The recommended improvements are eligible for a grant if the adviser has identified a direct link with Defence industrial priorities.


What are the eligibility criteria?

To be eligible you must:

  • be a small to medium enterprise (SME) with less than 200 employees
  • be applying to implement recommendations identified by your CDIC business adviser in your advisory service report
  • have an Australian Business Number (ABN)
  • be registered for the Goods and Services Tax (GST)

and be one of the following entities:

  • a company, incorporated in Australia
  • a company limited by guarantee
  • an incorporated trustee on behalf of a trust.

We can only accept applications:

  • where you apply within 12 months of receiving a CDIC advisory service report.

To be eligible your project must:

  • sufficiently improve the capability, capacity or sustainability of your business to meet Defence’s need for a product or service
  • have a clear link to a recommendation identified in your CDIC advisory service report
  • engage a provider that is external to your business to provide a service
  • not have commenced or had any costs incurred prior to notification that your application is successful
  • have at least $5,000 in eligible expenditure.


Before you apply

You will need to obtain quotes from service providers to implement the improvements you wish to make.

Your service providers should prepare their quotes in line with the guidance for service providers.

How to apply

The Capability Improvement Grant is no longer accepting applications for the 2021-22 financial year.

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CDIC Redback Boots case study


Redback Boots accessed CDIC advisory services and a Capability Improvement Grant to improve how their business works with Defence

Key documents

Grant opportunity guidelines

Sample grant agreement