diff --git a/docs/plans/2026-08-23-002-feat-true-shape-compaction-plan.md b/docs/plans/2026-08-23-002-feat-true-shape-compaction-plan.md
new file mode 100644
index 0000000..2f89ffc
--- /dev/null
+++ b/docs/plans/2026-08-23-002-feat-true-shape-compaction-plan.md
@@ -0,0 +1,146 @@
+---
+title: "feat: True-Shape Compaction for Outlined Irregular Parts"
+type: feat
+date: 2026-08-23
+---
+
+# feat: True-Shape Compaction for Outlined Irregular Parts
+
+## Summary
+
+Make v0.5 the first placement-quality milestone for irregular geometry. Parts
+that carry a validated polygon outline (added in v0.4.0) still occupy their
+full bounding box during placement, so real yield is understated and layouts
+waste plate. This plan adds a deterministic post-placement compaction pass
+that slides outlined parts along fixed axes until their true profiles reach
+the required clearance, plus an independent true-shape clearance verifier
+that gates every compacted layout. Placement claims only improve when the
+verifier proves them.
+
+---
+
+## Problem Frame
+
+v0.4.0 gave irregular parts exact areas, exact hole checks, and true profile
+rendering, but the MaxRects packer still reserves the whole bounding box.
+Two L-shaped gussets whose profiles could interlock are laid out as if they
+were rectangles, so sheets-needed and remnant candidates are pessimistic.
+Full no-fit-polygon nesting is a dedicated CAM engine and remains out of
+scope; the tractable, verifiable step is compaction: keep the proven
+bounding-box packing as the starting layout, then recover space by sliding
+parts toward the plate origin while their outlines (not their boxes) respect
+kerf-plus-gap clearance.
+
+The safety posture must not weaken. A compaction bug that overlaps two parts
+would be worse than the pessimism it fixes, so the compacted layout is only
+published when an independent polygon-clearance verifier — sharing no code
+path with the compactor — proves every pairwise profile distance and plate
+containment. Any verification failure discards compaction for that plate and
+keeps the original bounding-box layout.
+
+---
+
+## Requirements
+
+### Safety and verification
+
+- R1. Compaction must never move a part such that any two true profiles come
+  closer than kerf plus part gap, or any profile crosses the usable-area
+  boundary; rectangles keep their exact-footprint guarantees.
+- R2. An independent verifier must recheck every compacted plate using only
+  published placement data: pairwise minimum polygon distance, plate bounds,
+  and hole containment. A failed check discards compaction for that plate
+  and records a finding; it never blocks the run that the uncompacted layout
+  would have passed.
+- R3. Burn-DXF eligibility rules are unchanged: any irregular part still
+  suppresses burn output and holds the run at review_required.
+- R4. Determinism: identical input must produce identical compacted layouts;
+  no randomized restarts or time-dependent iteration.
+
+### Reporting honesty
+
+- R5. Metrics must distinguish the packing basis: bounding-box packing
+  utilization stays as-is, and a new true-shape utilization is reported only
+  for plates where every irregular part has a validated outline.
+- R6. Remnant candidates remain rectangle-based and unverified; compaction
+  may enlarge them but must not claim certified reusable stock.
+- R7. The result must record per-plate whether compaction ran, how much slide
+  distance it recovered, and whether the verifier accepted it.
+
+---
+
+## Design
+
+### Polygon clearance primitives (shared `geometry_verify`)
+
+- `polygon_min_distance(a, b)` — exact minimum distance between two simple
+  polygons via pairwise segment distance, with an early exit when bounding
+  boxes are farther apart than the current minimum. Zero when boundaries
+  touch or interiors overlap (overlap detected by any vertex containment or
+  edge intersection).
+- `polygon_within_rect(outline, width, height)` — containment of a profile
+  in the usable area.
+- Rectangles participate as their four-corner polygons so mixed plates are
+  handled uniformly.
+
+### Compaction pass (in `nest.py`, after MaxRects placement)
+
+Deterministic left-then-down sliding, one plate at a time:
+
+1. Order placements by (x, y, placement_id).
+2. For each placement, slide leftward (then downward) by scanning fixed
+   1/32 in steps from the current position and stopping one step before the
+   first offset where the profile violates `kerf + gap` clearance against
+   any already-fixed profile or the usable boundary. Clearance along a
+   slide is NOT monotonic for concave profiles (a notch can make an offset
+   clear, then blocked, then clear again), so binary search is unsound
+   here; the slide is a continuous motion, and the first blocking step is
+   the physical stop. Step count is bounded by plate size over resolution,
+   keeping the pass deterministic.
+3. Repeat the sweep until a pass moves nothing (bounded iteration count).
+
+U2's fixtures must include a concave alternating-clearance case — a
+profile whose slide path is clear, blocked by a notch neighbor, then clear
+again — proving the scan stops at the first contact rather than tunneling
+to a later clear interval.
+
+Only plates where every irregular part carries a validated outline are
+eligible; mixed plates with outline-less irregular parts keep the
+bounding-box layout untouched.
+
+### Verification and gating
+
+`verify_true_shape_placements(plate)` runs after compaction with the same
+clearance contract as the rectangular verifier. Acceptance replaces the
+plate's placements and recomputes plate metrics; rejection restores the
+original placements, adds a `COMPACTION_REJECTED` warning finding, and the
+run proceeds exactly as v0.4.0 would have.
+
+### Result contract additions
+
+- Plate report: `compaction: {ran, accepted, recovered_in, passes}`.
+- Metrics: `true_shape_utilization_pct` with approximation label, present
+  only when R5's condition holds.
+- Nest-result schema additions are additive; schema version stays 1.0.0.
+
+---
+
+## Units of Work
+
+- U1. Polygon distance and containment primitives with exhaustive unit tests
+  (touching, overlapping, nested, translated-apart cases).
+- U2. Compaction pass behind a `--compact-outlines` flag defaulting off in
+  the direct engine and pipeline until U3 lands; deterministic-layout tests.
+- U3. Independent true-shape verifier plus the discard-on-failure gate;
+  adversarial tests that corrupt a compacted layout and prove rejection.
+- U4. Metrics, plate-report contract, schema, renderer updates (compacted
+  outlines drawn at their new positions), SKILL.md and README boundaries.
+- U5. Flip the default on with a recorded before/after fixture comparison
+  demonstrating recovered plate area, then release as v0.5.0.
+
+## Non-Goals
+
+- No-fit-polygon or free-rotation true-shape nesting.
+- Any change to burn-DXF eligibility for irregular parts.
+- Curved (arc/spline) outline segments; outlines remain polygonal.
+- Remnant certification.
diff --git a/skills/_shared/pi_steel/geometry_verify.py b/skills/_shared/pi_steel/geometry_verify.py
index fb0618d..b6b18a3 100644
--- a/skills/_shared/pi_steel/geometry_verify.py
+++ b/skills/_shared/pi_steel/geometry_verify.py
@@ -246,6 +246,83 @@ def hole_within_outline(hole: dict[str, Any], outline: list[Any]) -> bool:
     return False
 
 
+def _segment_min_distance(p1, p2, p3, p4) -> float:
+    """Minimum distance between two closed segments."""
+    if _segments_touch(p1, p2, p3, p4):
+        return 0.0
+    return min(
+        _point_segment_distance(p1, p3, p4),
+        _point_segment_distance(p2, p3, p4),
+        _point_segment_distance(p3, p1, p2),
+        _point_segment_distance(p4, p1, p2),
+    )
+
+
+def _polygon_edges(outline: list[Any]) -> list[tuple[Any, Any]]:
+    count = len(outline)
+    return [
+        (outline[index], outline[(index + 1) % count]) for index in range(count)
+    ]
+
+
+def rect_outline(width: float, height: float) -> list[list[float]]:
+    """The four-corner polygon of an axis-aligned rectangle at the origin."""
+    return [[0.0, 0.0], [width, 0.0], [width, height], [0.0, height]]
+
+
+def polygons_overlap(first: list[Any], second: list[Any]) -> bool:
+    """Whether two simple polygons share boundary or interior points."""
+    if any(point_in_polygon(point, second) for point in first):
+        return True
+    if any(point_in_polygon(point, first) for point in second):
+        return True
+    return any(
+        _segments_touch(*edge_a, *edge_b)
+        for edge_a in _polygon_edges(first)
+        for edge_b in _polygon_edges(second)
+    )
+
+
+def polygon_min_distance(first: list[Any], second: list[Any]) -> float:
+    """Exact minimum distance between two simple polygons; zero on contact.
+
+    Uses a bounding-box early exit per edge pair so dense outlines stay
+    affordable inside pairwise plate verification.
+    """
+    if polygons_overlap(first, second):
+        return 0.0
+    minimum = math.inf
+    for edge_a in _polygon_edges(first):
+        (ax1, ay1), (ax2, ay2) = edge_a
+        for edge_b in _polygon_edges(second):
+            (bx1, by1), (bx2, by2) = edge_b
+            if (
+                min(ax1, ax2) - minimum > max(bx1, bx2)
+                or min(bx1, bx2) - minimum > max(ax1, ax2)
+                or min(ay1, ay2) - minimum > max(by1, by2)
+                or min(by1, by2) - minimum > max(ay1, ay2)
+            ):
+                continue
+            distance = _segment_min_distance(*edge_a, *edge_b)
+            if distance < minimum:
+                minimum = distance
+                if minimum == 0.0:
+                    return 0.0
+    return minimum
+
+
+def polygon_within_rect(
+    outline: list[Any], width: float, height: float
+) -> bool:
+    """Whether every vertex lies inside the axis-aligned 0..width x 0..height box."""
+    epsilon = 1e-9
+    return all(
+        -epsilon <= point[0] <= width + epsilon
+        and -epsilon <= point[1] <= height + epsilon
+        for point in outline
+    )
+
+
 def gross_area(geometry: dict[str, Any]) -> float:
     if geometry.get("shape") == "irregular":
         outline = geometry.get("outline")
diff --git a/tests/test_outline_geometry.py b/tests/test_outline_geometry.py
index d7fd6b0..00578f0 100644
--- a/tests/test_outline_geometry.py
+++ b/tests/test_outline_geometry.py
@@ -379,3 +379,41 @@ def test_placement_outline_schema_rejects_degenerate_vertex_lists():
     assert validator.is_valid({"outline": [[0, 0], [1, 0], [1, 1]]})
     assert not validator.is_valid({"outline": [[0, 0]]})
     assert not validator.is_valid({"outline": [[0, 0], [1, 0]]})
+
+
+def test_polygon_distance_primitives():
+    from pi_steel.geometry_verify import (
+        polygon_min_distance,
+        polygon_within_rect,
+        polygons_overlap,
+        rect_outline,
+    )
+
+    unit = rect_outline(2, 2)
+    apart = [[5, 0], [7, 0], [7, 2], [5, 2]]
+    touching = [[2, 0], [4, 0], [4, 2], [2, 2]]
+    overlapping = [[1, 1], [3, 1], [3, 3], [1, 3]]
+    nested = [[0.5, 0.5], [1.5, 0.5], [1.5, 1.5], [0.5, 1.5]]
+
+    assert not polygons_overlap(unit, apart)
+    assert polygons_overlap(unit, touching)
+    assert polygons_overlap(unit, overlapping)
+    assert polygons_overlap(unit, nested)
+
+    assert polygon_min_distance(unit, apart) == 3.0
+    assert polygon_min_distance(unit, touching) == 0.0
+    assert polygon_min_distance(unit, overlapping) == 0.0
+    assert polygon_min_distance(unit, nested) == 0.0
+    # Diagonal separation: closest corners are (2,2) and (4,4).
+    diagonal = [[4, 4], [6, 4], [6, 6], [4, 6]]
+    import math
+
+    assert abs(polygon_min_distance(unit, diagonal) - math.hypot(2, 2)) < 1e-9
+
+    # An L-shape and a small square nested near (not into) its notch.
+    near_notch = [[4, 4], [7, 4], [7, 5], [4, 5]]
+    assert not polygons_overlap(L_SHAPE, near_notch)
+    assert polygon_min_distance(L_SHAPE, near_notch) == 1.0
+
+    assert polygon_within_rect(L_SHAPE, 8, 6)
+    assert not polygon_within_rect(L_SHAPE, 7, 6)