Sovereign Industrial Capability Priority Grants

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What is the Sovereign Industrial Capability Priority Grant?

The Sovereign Industrial Capability Priority Grant provides funding for projects that build capabilities aligned with Defence’s Sovereign Industrial Capability Priorities.


Case Studies

Sovereign Industrial Capability Grant

Bulletpoint helped SoftIron secure a grant of $1.5 million to open its first manufacturing facility in Australia.

The facility will build “clean” computer servers for the Australian Defence Force to be sure there is no unknown code in their data centres.

The project will further bolster Australia’s data infrastructure resilience by locally manufacturing our world-leading data centre solutions.


Sovereign Industrial Capability Priority Grant

Bulletpoint assisted Thomas Global Systems in securing a grant of $2 million to develop and manufacture next-generation avionics and high-integrity defence electronics.

The company will develop and qualify two new flight-critical avionics products – an Enhanced Upfront Display Unit and a Keyboard Unit for Boeing AH-64 Apache Helicopter, a significant US military airborne program.

The products will utilise extant, proven Thomas Global technology and processes, which will be customised to suit the Apache program’s requirements.

The Australian Government has announced plans to purchase Apache helicopters as part of its LAND 4503 program.

Thomas Global designs, manufactures and supports highly engineered and reliable electronic systems solutions for commercial aviation, defence and other high-integrity transportation applications.

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Sovereign Industrial Capability Priority Grants



The objective of the Sovereign Industrial Capability Priority grant is to support Australian SMEs to supply capabilities that are most critical to Defence. The Sovereign Industrial Capability Priority Grants will help Australian SMEs to invest in projects that build capabilities aligned with Defence’s stated Sovereign Industrial Capability Priorities.

The intended outcome of the grant is to grow a robust and resilient Australian SME industrial base capable of providing a significant contribution to Sovereign Industrial Capability Priorities.



The Centre for Defence Industry Capability (CDIC) is a key initiative of the 2016 Defence Industry Policy Statement. The CDIC provides strategic leadership for the Australian defence sector and partners with industry to help build a strong, sustainable, innovative and internationally competitive Australian industry that meets defence capability requirements.

The intended outcomes of the CDIC are to:

  • improve the business capability, productivity and global competitiveness of small and medium enterprises (SMEs) in the defence sector
  • ensure that industry and Defence are well connected in order to tailor business capabilities to defence industrial priorities
  • contribute to a strong, sustainable, and internationally competitive defence industry.



The following key changes have been made to Sovereign Industrial Capability Priority Grants:

  • Minimum grant funding available has increased from $50,000 to $70,000.
  • Maximum grant funding available has increased from $1 million to $1.4 million.
  • Industry co-contribution has reduced from 50% of eligible project value to 30% of eligible project value.
  • Design, engineering and commissioning activities and workforce training and accreditation must clearly relate to the core project activities.

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Sovereign Industrial Capability Priority Grants

Eligible Projects

To be eligible your project must:

  • include eligible activities and eligible expenditure
  • have at least $100,000 in eligible expenditure
  • occur within Australia.

The maximum grant period is 30 months.


Eligible Applicants

To be eligible for the Sovereign Industrial Capability Priority grant, you must

  • be an SME with less than 200 employees
  • have an Australian Business Number (ABN)

and be one of the following entities:

  • a company, incorporated in Australia
  • an incorporated trustee on behalf of a trust

In order to be eligible for the Sovereign Industrial Capability Priority grant you must

  • provide evidence from your board (or chief executive officer or equivalent if there is no board) that the project is supported, and that you can complete the project and meet the costs of the project not covered by grant funding
  • provide an external Accountant Declaration that confirms you can fund your share of the project costs. You must use the Accountant Declaration form available at the bottom of this page.



Sovereign Industrial Capability Priorities applications open on an ongoing basis.


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Sovereign Industrial Capability Priority Grants


More Information


How to get the Sovereign Industrial Capability Priority grant?

Priorities – 50%
The extent to which your project will help you contribute to Defence’s Sovereign Industrial Capability Priorities

You should demonstrate this by describing the extent that your project will contribute to the development, enhancement and maintenance of one or more of the Sovereign Industrial Capability Priorities, as outlined in the 2018 Defence Industrial Capability Plan.

Capability – 30%
Your capacity, capability and resources to deliver the project.

You should demonstrate this through identifying:

  1. your plan to manage the project. Include detail on the key risks, timeframes and budget.
  2. your track record managing similar projects. Include detail on the key personnel with the right skills and experience, including management and technical staff who will manage the delivery of the project.
  3. how you will measure the success of the project.
  4. your ability to secure your intellectual property, equipment and technology against physical and cyber threats.

Impact – 20%
The impact of grant funding.

Demonstrate how the grant funding will assist your organisation by:

  • describing the likelihood the project would proceed without the grant and explain how the grant will benefit the size and timing of your project. If you have already received a SICP grant explain why you need additional funding.
  • justifying the funding amount requested with respect to the scale of the project and intended outcomes.
  • how the project will improve the efficiency and competitiveness of your business. Include detail on the commercial viability of the project.
  • the broader economic benefits from your project.

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Sovereign Industrial Capability Priority Grants

Sovereign Industrial Capability Priority

Sovereign Industrial Capability Priorities are industrial capabilities considered critical to Defence and for which Australia must have access to, or control over, the skills, technology, intellectual property, financial resources and infrastructure that underpin those capabilities.

The initial Sovereign Industrial Capability Priorities are:

  • Collins class submarine maintenance and technology upgrade
  • continuous shipbuilding program (including rolling submarine acquisition)
  • land combat vehicle and technology upgrade
  • enhanced active and passive phased array radar capability
  • combat clothing survivability and signature reduction technologies
  • advanced signal processing capability in electronic warfare, cyber and information security, and signature management technologies and operations
  • surveillance and intelligence data collection, analysis, dissemination and complex systems integration
  • test, evaluation, certification and systems assurance
  • munitions and small arms research, design, development and manufacture
  • aerospace platform deep maintenance.

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Latest News

Hendon Semiconductors, a division of Legend Corporation, recently announced a notable achievement in securing a $690,000 grant from the Federal Government’s Sovereign Industrial Capability Priority Grant program. This funding, in conjunction with matching investments from Hendon, is earmarked for the launch of the Defence Manufacturing Capability Modernisation Project.

The primary objective of this initiative is to improve Hendon’s capabilities in producing quality prototypes and managing small manufacturing runs of electronics for the defence sector. Brenton Judge, the executive general manager for Hendon Semiconductors, expressed his excitement about fast-tracking the company’s modernisation. He emphasised the project’s focus on reducing reliance on overseas partners, thereby bolstering innovation in the Australian Defence and other industries.

The modernisation project, with a total investment of $1.6 million, encompasses the procurement and installation of state-of-the-art equipment. This includes PCB prototyping equipment, flying probe test systems, conformal coating machine, X-ray machine, and soldering roots. Hendon plans to upgrade its facilities to boost Hybrid Integrated Circuit and Printed Circuit Board Assembly production capabilities, thereby enhancing sustainment services for the defence sector.

The completion of the upgraded facility is anticipated in October 2024, with most equipment set to be operational by early March. Hendon Semiconductors’ successful grant acquisition and strategic modernisation project mark a significant step towards reinforcing Australia’s self-sufficiency in defence innovation. The $690,000 grant, coupled with internal investments, underscores Hendon’s commitment to advancing its manufacturing capabilities and fostering domestic defence innovation.


Ten Australian manufacturing businesses are set to receive over $3.6 million in funding. Notable allocations include over $800,000 for a New South Wales company focused on producing hard armour for military personnel, $585,000 for a South Australian manufacturer working on a large-scale environmental test chamber, and more than $290,000 for a Victorian business engaged in the manufacturing of air brake fittings for Defence vehicles.

These grants are part of an initiative that has already benefited over 220 Australian businesses, with nearly $97 million awarded thus far. The programs responsible for these grants, the Defence Global Competitiveness and Sovereign Industrial Capability Priority programs, offer 50 percent matching grants to support Australian companies in enhancing their manufacturing capabilities, leveraging their expertise, and creating job opportunities.

The latest recipients are: 

  • Armor Australia (NSW) receiving $809,580 to construct high-pressure compression moulding stations with precision thermal and hydraulic controls to produce advanced hard armour products for Defence personnel in land, vehicle and aerospace platforms.
  • Advanced Navigation (NSW) receiving $150,000 to install a calibration and testing system for validated production of sonar hydrophone sensors deployed in autonomous underwater vehicles.
  • Protonautics (Queensland) receiving $150,000 to acquire a computerised numerical control machining capability to produce components for the Boeing MQ-28 Ghost Bat and the Currawong battlespace communications system.
  • Cold Logic (SA) receiving $585,598 to install a large-scale environmental test chamber facility to evaluate components and systems used in maritime, combat vehicle and aerospace platforms.
  • MyModular (SA) receiving $420,166 to install specialised injection-moulding equipment to produce low-voltage lighting solutions used in shipbuilding facilities.
  • Kennewell (SA) receiving $357,091 to acquire a coordinate measuring machine and video measuring system to form a metrology lab for geometric validation of complex manufactured components used in Defence maritime, land, radar and medical technology applications.
  • McMahon Metal Fabrication (SA) receiving $150,000 to acquire a precision sheet and tube cutting metal fibre laser to fabricate metal components with technical capability and scale required by the US Navy.
  • Advanced Composite Structures Australia (Victoria) receiving $187,706 to acquire new cutting, winding and geometric verification equipment to manufacture structures from ultra-high-temperature fibre composite materials to enable supply of components for hypersonic applications and space vehicles.
  • Parish Engineering Company (Victoria) receiving $291,334 to acquire a computerised numerical control lathe with barfeeder to produce air brake fittings and couplings for Defence vehicles.
  • IKAD Engineering (WA) receiving $560,410 to acquire a range of computerised numerical control capabilities including wire cutter, lathes, turning and machining centres to produce complex components for naval ships systems.

Seven Australian businesses have been awarded grants worth a total of $3.8 million under the Defence Global Competitiveness program, and the Sovereign Industrial Capability Priority program.

These grants provide up to half the cost of a project to help Australian businesses build capabilities crucial for Defence and to overcome barriers for defence exports.

Grants have been awarded for the following projects:

  • Advanced Navigation (NSW) is receiving $830,665 for a custom fibre optic coil winding system for strategic-grade fibre optic gyroscope inertial navigation systems. These are used for accurate positioning, autonomous capability and high value asset tracking.

  • Frontline Safety Australia (NSW) is receiving $494,343 for a lens cutting machine to produce ballistic protective eyewear as a component of the Ballistic and Laser Ocular Protection System (BLOPS) program.

  • Adelaide Profile Services (SA) is receiving $781,018 for an advanced computerised numerical control dual thermal gantry for processing large non-conventional steel plates, such as those required for naval shipbuilding.

  • Quantx Labs (SA) is receiving $589,000 to establish a hybrid integration facility for compact quantum sensors which provide precise timing functions within situational awareness capabilities, such as the Joint Operational Radar Network.

  • Redline Engineering (VIC) is receiving $676,793 for multi-axis machining and dimensional verification capability. This will support production of complex mechanical components such as radar, small arms and munitions.

  • Muir Engineering (TAS) is receiving $300,000 in two grants. They are for the acquisition and commission of computerised numerical control machining capabilities, and a two-tonne capacity gantry crane for manufacturing of anchoring equipment for international defence shipbuilding markets.

  • George Lovitt Manufacturing (VIC) is receiving $150,000 for coordinate measuring machines for quality control of larger manufactured components. This will support international defence projects such as the F-35 Joint Strike Fighter.


6 SMEs have been awarded grants worth $3.2 million to support the development of new technologies and products that will improve the defense manufacturing sector. The funding is expected to create new jobs, improve production capabilities, and strengthen Australia’s defense capabilities.

Recipients include:

  • Lightforce$1 million to establish new capabilities for manufacturing precision riflescopes and other optic products in South Australia.
  • Integra Systems$1 million to install panel bending and fibre optic laser cutters.
  • XTEK Limited$747,707 to acquire and commission a custom press and a new virtual machining centre. 
  • Direct Edge Manufacturing$342,470 to purchase specialised cutting equipment to enhance land combat and protected mobility vehicle components.
  • Stahl Metall $74,900 to install wire braiding and test units.
  • Fire System Services$62,212 to install new equipment, enhancing its testing and certified maintenance of pressure vessels


Jim McDowell, who is the CEO of Nova Systems Australia and New Zealand, argues that the COVID-19 pandemic has highlighted the importance of Australia’s sovereign capability, particularly in the defense industry. He states that the pandemic has demonstrated the need for Australia to have the ability to manufacture and supply critical defense equipment domestically, rather than relying on imports.

McDowell goes on to highlight some of the challenges that Australia faces in developing its sovereign capability, such as a lack of investment in research and development, as well as a lack of collaboration between industry and academia. He also notes that there is a need for greater investment in defense industry infrastructure, particularly in regional areas.

Overall, McDowell makes a case for why it’s important for Australia to prioritize the development of its sovereign capability in the defense industry. He argues that doing so will not only enhance Australia’s national security but will also create jobs and economic growth in the country.


XTEK has been awarded two grants from the Department of Defence Global Competitiveness (DGC) and Sovereign Industrial Capability Priority (SICP) programs. The grants are valued at $164,268.50 and $658,209.20 respectively.

The DGC-backed project covers investment in a new “CNC Virtual Machining Centre” at the company’s Adelaide site. This would allow for “safer and more complex machining, reducing costs of outsourcing and improved productivity” and speed up prototyping and new product development, as well as assist maintenance.

The SICP grant supports improvements to XTEK’s helmet pre-forming and production and investment in acquiring and commissioning a new custom helmet pre-forming press, allowing a doubling of current output.



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