How Australian manufacturers can successfully access Defence Industry funding


Image credit: Systematiq.

As the Australian government continues to invest in developing Defence capabilities, it’s never been a better time for SMEs to explore the opportunities within the growing sector.

The Defence Industry are seeking more involvement from Australian manufacturers, calling for more contribution to supply chains in major Defence programs and looking to increase Australian Industry Content (AIC) to be part of the procurement and sustainment process. Presented with a window of opportunity, SMEs can now become a part of large Defence Industry projects through supply chain contracts, grants and funding.

Recent years have seen a boom in investment within the Defence sector. The latest round of Defence Innovation Hub (DIH) contracts saw over 20 million in funding for innovative projects by local businesses.   

There are variety of different funding options available for Australian manufacturing companies. Current grants include the Sovereign Industrial Capability Priorities Grant (SICPG), the Defence Global Competitiveness Grant, Skilling Australian Defence Industry (SADI) Grant and the Capability Improvement Grant. The CEO of J3Seven, Chemical, Biological, Radiological, Nuclear and Explosive specialists, Gareth Molnar recognises the wealth of choices now available for SMEs interested in working in the Defence sector. 

“These grants offer unique opportunities for a potential Defence SME,” Molnar said.  

Finding the right grant for your SME 

Initially, an SME will need to decide whether their business’s capabilities align with the Defence procurement priorities and general market opportunities.

SMEs looking to invest in their defence-related capabilities can then apply to the Centre for Defence Industry Capability or CDIC for funding to cover between 50 to 100 per cent of costs depending on the grant and nature of support required. However, the process of accessing this funding can be tricky, therefore it’s important to identify the right grant.  

Get started with the Centre for Defence Industry Capability  

Systematiq consultants are experts in Defence requirements and offer insights into the Defence procurement process. Their recommendation is to begin with the Centre for Defence Industry Capability (CDIC). Working with the CDIC business advisors, SMEs can identify areas to improve on and learn how to better position their business within the Defence sector. 

“CDIC is a good starting point for an SME to explore the opportunities available for their business,” Systematiq pre-contracts manager, Helen Barry suggests.  

Understanding your objectives and creating a strategy  

When it comes to applying for a Defence grant, most SMEs underestimate the time and effort required for a competitive submission. The process can be protracted, therefore it’s essential to do the upfront planning required.  

SMEs need to ensure that they understand what the grant aims to achieve, for example job growth or new capabilities, and provide evidence on how they are addressing the criterion. Having a strategy developed can ensure that SMEs are clear and concise in their responses, and can meet the application process under tight timelines.  

Systematiq recommends SMEs should approach developing a strategy for the response much like they would writing a proposal.

Brydon Johnson, director of Business Development at Systematiq, suggests SMEs “consider a simple way of outlining the issue they want to address such as not having the skills internally to respond to Defence considerations. Then identify a solution to address the issue (such as training and upskilling) and outline the benefit in terms of enabling work to be secured or contributing to the employment (and therefore economic) growth of their business.”  

Collaborating with an experienced consulting firm such as Systematiq can help take the pressure off. With a thorough understanding of the process, Systematiq can provide strategic guidance through-out the application submission and assist in filling in the required gaps.  

“SMEs applying for defence related grants must understand the problem they are solving. The understanding needs to be clear even before they begin the application. The response developed must highlight the gap that your business is trying to fill.” Affirms Helen Barry, Systematiq pre-contracts manager.  

Partnering with a sponsor for SICPG and DIH contract processes 

The Sovereign Industrial Capability Priority Grants (SICPG) offer funding for Australian businesses to build industrial capabilities which align with Defence’s sovereign industrial capability priorities.  

Applications are assessed every eight to twelve weeks, with a panel assessing each application against eligibility and merit criteria. The panel is made of up representatives from the CDIC and the Department of Defence. A successful application scores highly against each merit criterion and other applications of similar size, complexity and grant amount requested.  

Much like the Defence Innovation Hub (DIH) contracts, understanding the process and tailoring the application to meet specific criterion is crucial. Systematiq recommends identifying with a sponsor inside the capability management area of the Australian Defence Force (ADF) to successfully promote your idea is a good way to achieve this. 

Systematiq senior consultant, Sarah Norton says that early identification of a suitable sponsor “ensures that the innovation is tailored to meet a Defence need, demonstrating understanding of how the innovation suits the Defence environment, and increases the value proposition for funding the proposal.”  

To find a sponsor, Systematiq suggests taking advantage of opportunities to network with Defence Capability Managers at industry events and trade shows. By connecting with contacts in Defence, you can engage and collaborate with other organisations and learn how you can contribute to supply chains. Systematiq can also assist in helping your SME find a suitable sponsor.   

If you are an SME looking for specialised Defence grant application skills or wanting to learn more about the opportunities available for your business through Defence grants and contracts, contact Systematiq or download their white paper here. 

By Systematiq staff.