Objective: This article analyzes the implementation of two state grant programs in Tennessee aimed at improving the quality of in-demand postsecondary career and technical education (CTE) programming at community and technical colleges. We use insights from our findings to propose a conceptual framework for understanding how external funding can reduce institutional capacity constraints in similar contexts. Method: Building off a previous study, we leverage in-depth interview data with 43 participants across Tennessee's workforce development system to better understand how administrators perceived state grant goals, what processes they used to address institutional capacity constraints, and what challenges they experienced while implementing grant-funded programs. Results: We find strong alignment of perceived grant goals between the state, which developed the program, and the practitioners who implemented it. We find that the implementation strategies employed included purchasing new equipment, investing in facilities, developing work-based learning opportunities, hiring new faculty and staff, and building collaborations with outside stakeholders. Finally, our data suggest that practitioners faced challenges optimizing the use of funds to address capacity constraints. Contributions: Developing and maintaining high quality CTE credential programs is a challenge for community and technical colleges across the United States. We describe how this has been done successfully in Tennessee and use insights from this context to propose a general framework for building capacity in postsecondary CTE.