The Navy competed a $27M SBIR Phase III contractfor domestic lithium-ion cell manufacturing on April 6, 2026. One offer was received. For small UAV and drone batteries, approximately 19 monthsfrom the January 1, 2028 new-acquisition deadline under Section 842, that single-bid outcome on the year's largest defense cell production award is the supply base showing its depth.
Gap math for January 2028, small UAV/drone cells
Two suppliers are qualified or in qualification for NDAA-compliant small UAV/drone cells in public procurement data: Packet Digital (via Badland Batteries, Fargo, ND) and Amprius Technologies (Fremont, CA, with domestic contract manufacturing through Nanotech Energy and an allied-nation pathway through its Korea Battery Alliance). A third potential pathway is emerging through CRG Defense, which manufactures cells and packs for UAS platforms and claims full Section 842 compliance, now backed by a domestic cathode supply agreement with 6K Energy. Earlier-stage than Packet Digital or Amprius, but directionally real.
Three pathways at various stages of maturity. Defense cell qualification cycles run 18–36 months depending on chemistry, form factor, and platform integration. No new entrant starting qualification today clears the 2028 deadline for a new program of record. No Section 842 waiver invocations have appeared in public sources, which is expected: waivers become relevant only when the deadline binds at the contract level, which requires a DFARS implementing clause that has not been published.
What moved — Packet Digital's production ramp
Packet Digital's contract sequence now totals approximately $37M across two vehicles. The $27M award (N6833526F1047, NAWCAD Lakehurst) covers pilot prototype development, raw-material procurement, pilot production, LRIP-1, and LRIP-2 manufacturing of pouch-cell lithium-ion batteries. Work is 100% Fargo. Completion: April 2028, three months past the January 2028 new-acquisition deadline. The production ramp parallels the statute with zero margin.
A separate $9.8M Phase 3 award under the Logistics UAS Family of Advanced Batteries program funds equipment commissioning and volume scale-up at the Badland Batteries cell plant, which completed construction during Phase 2. Different program names, overlapping scope, same Fargo facility. Whether these are distinct government commitments or phases of a single program is not explicit in public sources.
Cathode chemistry is not disclosed. Pouch-cell lithium-ion is confirmed. Whether the upstream cathode and precursor supply chain satisfies the FEOC component-cost threshold cannot be determined from public disclosures. Packet Digital has signed an MOU with LibertyStream for lithium carbonate sourcing. That is an MOU, not a supply contract, not a qualified source, and not evidence that the upstream chain is FEOC-clear.
The "one offer received" language is worth sitting with. The contract was formally competed. When $27M in defense cell manufacturing draws a single bidder, the competition is nominal.
What moved — Amprius production status
Amprius' DIU contract reached $18.1M as of Q1 2026 (8-K filed May 6), adding $3.3M to the prior $14.8M total. The company has finalized NDAA-compliant sourcing for all 11 critical cell components, covering more than 95% of manufacturing costs per its Q4 2025 8-K.
The domestic pathway runs through Nanotech Energy in Chico, CA. As of Q1 2026 earnings, Amprius has validated a 21700 cylindrical cell with Nanotech "performing approximately 10% better than standard competitors" per the earnings call summary. The metric (energy density, cycle life, rate capability) was not specified. CEO commentary characterized typical setup timelines as five to six months from the February 2026 announcement, pointing to production capability around July–August 2026. The call also referenced "additional capacity coming online from Korean and U.S. manufacturing partners" in prospective language. No SEC filing confirms volume shipments of NDAA-compliant cells through either pathway as of May 2026.
The Korea Battery Alliance provides contractual access to 2.0 GWh of annual capacity per the Q1 10-Q. Korea qualifies as an allied nation under Section 842. But the specific Korean contract manufacturers are not named in public filings, and no filing confirms compliant cells are shipping at volume through this pathway. I cannot resolve this from available disclosures.
What moved — 6K Energy and CRG Defense cathode supply
6K Energy and CRG Defense announced a seven-year cathode supply agreement for single-crystal NMC811, produced at 6K's North Andover, MA facility, with additional capacity expected from its PlusCAM facility in Jackson, TN in early 2028. CRG Defense manufactures cells and packs for UAS platforms and claims full Section 842 compliance. This is a supply agreement, not a contract award, but the underlying DLA Battery Network Program III grant ($1.9M for NMC721 cathode development) provides government validation. A third potential domestic pathway, earlier-stage than Packet Digital or Amprius.
January 2029 — 6T vehicle batteries, static
The January 2029 deadline covers standard batteries. Two allied-nation and domestic suppliers hold MIL-PRF-32565C Type 2 certification for 6T lithium-ion: Epsilor's ELI-52526-DM (144 Ah, certified since 2023) and Bren-Tronics' BT-70939M-TPB (105 Ah, now under EnerSys' ION-X brand). Epsilor's higher-capacity GM variant (174 Ah, 4,400 Wh) was in US Army lab testing as of September 2025; no public confirmation of certification completion has appeared since. No DLA or Army procurement contract for either supplier was found in public sources covering October 2025 through May 2026. I note this as a research gap; absence from public sources does not confirm absence of activity.
Ultralife, named in the brief as a legacy DLA supplier, shows no new public procurement signal in this period. The structural question for 6T lives upstream: whether NCA cathode materials and lithium precursors in these cells clear the FEOC component-cost threshold. Neither Epsilor nor Bren-Tronics discloses cell-level sourcing. No domestic NCA cathode supply program specific to 6T has appeared in public sources. No significant change since September 2025.
January 2031 — UUV applications
The January 2031 deadline covers existing acquisition programs, including UUV applications. L3Harris secured a Navy contract for the Iver4-900 AUV in March 2026, featuring what the company describes as the first US Navy-approved Li-ion battery for a submarine UUV. Separately, Kraken Robotics (Canadian) booked $35M in SeaPower battery orders in January 2026 for UUV long-endurance operations. Neither signal addresses FEOC component-level compliance. UUV power systems are specialty applications with limited commercial supply chain overlap, and the longer runway to 2031 reduces near-term urgency. The gap is not measurably narrowing or widening against the Section 842 threshold.
The rule that doesn't exist
Nineteen months remain until the January 2028 prohibition applies to new acquisitions. A standard DFARS rulemaking cycle runs roughly twelve months. If that timeline holds, a proposed rule would need to publish by approximately January 2027 to land a final rule before the deadline. No proposed or final DFARS rule implementing Section 842 battery restrictions has been published. The DoD open DFARS cases list dated May 15, 2026 shows FY 2026 NDAA rulemaking in process, likely bundled within the broader 10 U.S.C. § 4872 case queue. No interim guidance, class deviation, or contracting officer memo specific to battery FEOC compliance has been found in public sources.
The statute is operative. The DFARS clause that would let contracting officers enforce it remains unwritten.
| Deadline | Category | Qualified / In-Qualification Suppliers | Gap Trend | Last Signal |
|---|---|---|---|---|
| Jan 2028 | Small UAV/drone cells (new acquisitions) | Packet Digital, Amprius, CRG Defense (early) | Narrowing, decelerating | Packet Digital $27M award, Apr 2026 |
| Jan 2029 | 6T vehicle batteries (standard) | Epsilor, Bren-Tronics (certified); upstream FEOC unclear | Static | Epsilor Army testing, Sep 2025 |
| Jan 2031 | UUV applications (existing programs) | L3Harris, Kraken (no FEOC visibility) | Indeterminate | L3Harris Iver4-900 contract, Mar 2026 |
Gap assessment, May 19, 2026: Narrowing for small UAV/drone cells, from a base of two to three suppliers with production timelines that offer no margin against January 2028. Static for 6T, where the certified manufacturer layer exists but the upstream cathode supply question remains unanswered. Early signals for UUV, with no FEOC compliance visibility. The rate of narrowing is positive but decelerating against the calendar. The supply gap is real and quantifiable. The implementation gap, measured in missing rulemaking rather than missing suppliers, may prove larger.
Things to follow up on...
- Amprius Q2 production confirmation: The Spring 2026 NDAA-compliant production pathway target remains unconfirmed in SEC filings; the Q2 2026 8-K expected in August should reveal whether Nanotech Energy volume shipments and Korea Battery Alliance throughput have actually started.
- DFARS Section 842 rulemaking: The May 15, 2026 open cases list shows FY 2026 NDAA cases in the queue but no distinct Section 842 case number; the next DPAP/DARS open cases update should clarify whether battery FEOC restrictions have their own rulemaking track or remain bundled in the 10 U.S.C. § 4872 chain.
- Epsilor GM certification status: The higher-capacity ELI-52526-GM (174 Ah / 4,400 Wh) was in US Army MIL-PRF-32565C Type 2 lab testing as of September 2025, and eight months of silence on completion is becoming a signal worth tracking.
- Section 836 compliance repository: DoD must establish a voluntary public repository by January 1, 2027 where offerors attest to FEOC-compliant sourcing, and its launch timing will indicate how seriously the department is building enforcement infrastructure ahead of the 2028 deadline.