diff --git a/.github/workflows/ci.yml b/.github/workflows/ci.yml
index 90bcd21..8f0f876 100644
--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -16,19 +16,17 @@ jobs:
       matrix:
         os:
         - ubuntu-latest
-        python-version: ['3.12']
+        python-version: ['3.12', '3.13']
     steps:
     - uses: actions/checkout@v4
-    - name: setup python
-      uses: actions/setup-python@v5
+
+    - name: Install uv
+      uses: astral-sh/setup-uv@v4
       with:
-        python-version: ${{ matrix.python-version }}
+        enable-cache: true
 
-    - name: Install requirements and Run Tests
-      run: make test
+    - name: Set up Python ${{ matrix.python-version }}
+      run: uv python install ${{ matrix.python-version }}
 
-    - name: Run Coverage
-      uses: codecov/codecov-action@v4
-      with:
-        token: ${{ secrets.CODECOV_TOKEN }}
-        fail_ci_if_error: true
+    - name: Run Tests
+      run: uv run --python ${{ matrix.python-version }} pytest tests
diff --git a/.github/workflows/publish-grader-base-image.yml b/.github/workflows/publish-grader-base-image.yml
new file mode 100644
index 0000000..97c5c4e
--- /dev/null
+++ b/.github/workflows/publish-grader-base-image.yml
@@ -0,0 +1,69 @@
+name: Publish grader base image
+
+# Builds grader_support/Dockerfile.base and pushes
+# ghcr.io/mitodl/xqueue-watcher-grader-base to GHCR.
+#
+# Downstream grader images (e.g. graders-mit-600x) extend this base; keeping
+# it in GHCR lets the Concourse grader-image pipeline pull it as a trigger
+# without requiring DockerHub credentials.
+
+on:
+  push:
+    branches:
+      - master
+    paths:
+      - "grader_support/**"
+  schedule:
+    # Weekly rebuild to pick up base Python/OS security patches (Sunday 00:00 UTC)
+    - cron: "0 0 * * 0"
+  workflow_dispatch:
+
+env:
+  REGISTRY: ghcr.io
+  IMAGE_NAME: mitodl/xqueue-watcher-grader-base
+
+jobs:
+  build-and-push:
+    name: Build and push grader base image
+    runs-on: ubuntu-latest
+    permissions:
+      contents: read
+      packages: write
+
+    steps:
+      - name: Checkout repository
+        uses: actions/checkout@v4
+
+      - name: Log in to GHCR
+        uses: docker/login-action@v3
+        with:
+          registry: ${{ env.REGISTRY }}
+          username: ${{ github.actor }}
+          password: ${{ secrets.GITHUB_TOKEN }}
+
+      - name: Set up QEMU (for multi-platform builds)
+        uses: docker/setup-qemu-action@v3
+
+      - name: Set up Docker Buildx
+        uses: docker/setup-buildx-action@v3
+
+      - name: Extract image metadata
+        id: meta
+        uses: docker/metadata-action@v5
+        with:
+          images: ${{ env.REGISTRY }}/${{ env.IMAGE_NAME }}
+          tags: |
+            type=raw,value=latest,enable={{is_default_branch}}
+            type=sha,format=short
+
+      - name: Build and push
+        uses: docker/build-push-action@v6
+        with:
+          context: .
+          file: grader_support/Dockerfile.base
+          platforms: linux/amd64,linux/arm64
+          push: true
+          tags: ${{ steps.meta.outputs.tags }}
+          labels: ${{ steps.meta.outputs.labels }}
+          cache-from: type=gha
+          cache-to: type=gha,mode=max
diff --git a/.github/workflows/upgrade-python-requirements.yml b/.github/workflows/upgrade-python-requirements.yml
index 0cadb2c..6d1a48a 100644
--- a/.github/workflows/upgrade-python-requirements.yml
+++ b/.github/workflows/upgrade-python-requirements.yml
@@ -1,27 +1,31 @@
-name: Upgrade Python Requirements
+name: Update Dependencies
 
 on:
   schedule:
     - cron: "15 15 1/14 * *"
   workflow_dispatch:
-    inputs:
-      branch:
-        description: "Target branch against which to create requirements PR"
-        required: true
-        default: 'master'
 
 jobs:
-  call-upgrade-python-requirements-workflow:
-    uses: openedx/.github/.github/workflows/upgrade-python-requirements.yml@master
-    with:
-      branch: ${{ github.event.inputs.branch || 'master' }}
-      # optional parameters below; fill in if you'd like github or email notifications
-      # user_reviewers: ""
-      # team_reviewers: ""
-      email_address: "aurora-requirements-update@2u-internal.opsgenie.net"
-      send_success_notification: true
-    secrets:
-      requirements_bot_github_token: ${{ secrets.REQUIREMENTS_BOT_GITHUB_TOKEN }}
-      requirements_bot_github_email: ${{ secrets.REQUIREMENTS_BOT_GITHUB_EMAIL }}
-      edx_smtp_username: ${{ secrets.EDX_SMTP_USERNAME }}
-      edx_smtp_password: ${{ secrets.EDX_SMTP_PASSWORD }}
+  update-dependencies:
+    runs-on: ubuntu-24.04
+    permissions:
+      contents: write
+      pull-requests: write
+    steps:
+    - uses: actions/checkout@v4
+
+    - name: Install uv
+      uses: astral-sh/setup-uv@v4
+
+    - name: Update uv.lock
+      run: uv lock --upgrade
+
+    - name: Create Pull Request
+      uses: peter-evans/create-pull-request@v6
+      with:
+        token: ${{ secrets.REQUIREMENTS_BOT_GITHUB_TOKEN }}
+        commit-message: "chore: update uv.lock with latest dependency versions"
+        title: "chore: update dependencies"
+        body: "Automated dependency update via `uv lock --upgrade`."
+        branch: "chore/update-dependencies"
+        delete-branch: true
diff --git a/.gitignore b/.gitignore
index 9fc011c..d371a40 100644
--- a/.gitignore
+++ b/.gitignore
@@ -22,3 +22,10 @@ reports/
 \#*\#
 *.egg-info
 .idea/
+
+# uv
+.venv/
+
+# Kubernetes secrets — never commit real values
+deploy/kubernetes/secret.yaml
+Automated code Graders With xqueue-watcher.md
diff --git a/Dockerfile b/Dockerfile
index 89ee5bb..51c8824 100644
--- a/Dockerfile
+++ b/Dockerfile
@@ -1,26 +1,40 @@
-FROM ubuntu:xenial as openedx
+FROM python:3.11-slim AS base
 
-RUN apt update && \
-  apt install -y git-core language-pack-en apparmor apparmor-utils python python-pip python-dev && \
-  pip install --upgrade pip setuptools && \
-  rm -rf /var/lib/apt/lists/*
+ENV PYTHONDONTWRITEBYTECODE=1 \
+    PYTHONUNBUFFERED=1 \
+    LANG=C.UTF-8 \
+    LC_ALL=C.UTF-8
 
-RUN locale-gen en_US.UTF-8
-ENV LANG en_US.UTF-8
-ENV LANGUAGE en_US:en
-ENV LC_ALL en_US.UTF-8
+RUN apt-get update && \
+    apt-get install -y --no-install-recommends git-core && \
+    rm -rf /var/lib/apt/lists/*
+
+RUN useradd -m --shell /bin/false app
+
+COPY --from=ghcr.io/astral-sh/uv:latest /uv /usr/local/bin/uv
 
 WORKDIR /edx/app/xqueue_watcher
-COPY requirements /edx/app/xqueue_watcher/requirements
-RUN pip install -r requirements/production.txt
 
-CMD python -m xqueue_watcher -d /edx/etc/xqueue_watcher
+COPY pyproject.toml uv.lock ./
+RUN uv sync --frozen --no-dev --no-install-project
+
+COPY . /edx/app/xqueue_watcher
+RUN uv sync --frozen --no-dev && \
+    ln -s /edx/app/xqueue_watcher/.venv/bin/xqueue-watcher /usr/local/bin/xqueue-watcher
+# Note: the `codejail` optional extra (edx-codejail) is intentionally omitted
+# from this image.  In the Kubernetes deployment, student code runs inside an
+# isolated container (ContainerGrader) — the container boundary provides the
+# sandbox via Linux namespaces, cgroups, capability dropping, network isolation,
+# and a read-only filesystem.  codejail (AppArmor + OS-level user-switching)
+# requires host-level AppArmor configuration that is unavailable inside
+# Kubernetes pods and adds no meaningful security benefit on top of container
+# isolation.  Install the `codejail` extra only when running the legacy
+# JailedGrader on a bare-metal or VM host with AppArmor configured.
 
-RUN useradd -m --shell /bin/false app
 USER app
 
-COPY . /edx/app/xqueue_watcher
+CMD ["xqueue-watcher", "-d", "/etc/xqueue-watcher"]
 
-FROM openedx as edx.org
-RUN pip install newrelic
-CMD newrelic-admin run-program python -m xqueue_watcher -d /edx/etc/xqueue_watcher
+FROM base AS edx.org
+USER app
+CMD ["xqueue-watcher", "-d", "/etc/xqueue-watcher"]
diff --git a/Makefile b/Makefile
index 8a66fde..b124348 100644
--- a/Makefile
+++ b/Makefile
@@ -1,47 +1,29 @@
-NODE_BIN=./node_modules/.bin
-
 help:
-	@echo '                                                                                     		'
-	@echo 'Makefile for the xqueue-watcher                                                   		'
-	@echo '                                                                                     		'
-	@echo 'Usage:                                                                               		'
-	@echo '    make requirements                 install requirements for local development     		'
-	@echo '    make test                         run python unit-tests     	                 		'
-	@echo '    make clean                        delete generated byte code and coverage reports		'
-	@echo '                                                                                     		'
-
-COMMON_CONSTRAINTS_TXT=requirements/common_constraints.txt
-.PHONY: $(COMMON_CONSTRAINTS_TXT)
-$(COMMON_CONSTRAINTS_TXT):
-	wget -O "$(@)" https://raw.githubusercontent.com/edx/edx-lint/master/edx_lint/files/common_constraints.txt || touch "$(@)"
-
-upgrade: export CUSTOM_COMPILE_COMMAND=make upgrade
-upgrade: $(COMMON_CONSTRAINTS_TXT)
-	## update the requirements/*.txt files with the latest packages satisfying requirements/*.in
-	pip install -q -r requirements/pip_tools.txt
-	pip-compile --allow-unsafe --rebuild --upgrade -o requirements/pip.txt requirements/pip.in
-	pip-compile --upgrade -o requirements/pip_tools.txt requirements/pip_tools.in
-	pip install -q -r requirements/pip.txt
-	pip install -q -r requirements/pip_tools.txt
-	pip-compile --upgrade -o requirements/base.txt requirements/base.in
-	pip-compile --upgrade -o requirements/production.txt requirements/production.in
-	pip-compile --upgrade -o requirements/test.txt requirements/test.in
-	pip-compile --upgrade -o requirements/ci.txt requirements/ci.in
+@echo ''
+@echo 'Makefile for the xqueue-watcher'
+@echo ''
+@echo 'Usage:'
+@echo '    make requirements        sync dev dependencies with uv'
+@echo '    make test                run python unit-tests'
+@echo '    make docker-build        build the grader base Docker image'
+@echo '    make local-run           run locally with docker-compose'
+@echo '    make clean               delete generated byte code'
+@echo ''
 
 requirements:
-	pip install -qr requirements/production.txt --exists-action w
+	uv sync
 
-test.requirements:
-	pip install -q -r requirements/test.txt --exists-action w
+test: requirements
+	uv run pytest --cov=xqueue_watcher --cov-report=xml tests
 
-ci.requirements:
-	pip install -q -r requirements/ci.txt --exists-action w
+docker-build:
+	docker build -t xqueue-watcher:local .
+	docker build -t grader-base:local -f grader_support/Dockerfile.base .
 
-test: test.requirements
-	pytest --cov=xqueue_watcher --cov-report=xml tests
+local-run:
+	docker compose up
 
 clean:
 	find . -name '*.pyc' -delete
 
-# Targets in a Makefile which do not produce an output file with the same name as the target name
-.PHONY: help requirements clean
+.PHONY: help requirements test docker-build local-run clean
diff --git a/conf.d/600.json b/conf.d/600.json
index 10565e8..3052446 100644
--- a/conf.d/600.json
+++ b/conf.d/600.json
@@ -5,10 +5,14 @@
         "AUTH": ["lms", "lms"],
         "HANDLERS": [
             {
-                "HANDLER": "xqueue_watcher.grader.Grader",
+                "HANDLER": "xqueue_watcher.containergrader.ContainerGrader",
                 "KWARGS": {
-                    "grader_root": "../data/6.00x/graders/",
-                    "gradepy": "../data/6.00x/graders/grade.py"
+                    "grader_root": "/graders/",
+                    "image": "grader-base:local",
+                    "backend": "docker",
+                    "cpu_limit": "500m",
+                    "memory_limit": "256Mi",
+                    "timeout": 20
                 }
             }
         ]
diff --git a/deploy/kubernetes/configmap.yaml b/deploy/kubernetes/configmap.yaml
new file mode 100644
index 0000000..b910827
--- /dev/null
+++ b/deploy/kubernetes/configmap.yaml
@@ -0,0 +1,103 @@
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: xqueue-watcher-config
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
+data:
+  # Main watcher settings. See xqueue_watcher/settings.py for all keys.
+  xqwatcher.json: |
+    {
+      "POLL_INTERVAL": 1,
+      "LOGIN_POLL_INTERVAL": 5,
+      "REQUESTS_TIMEOUT": 5,
+      "POLL_TIME": 10
+    }
+
+  # Logging configuration
+  logging.json: |
+    {
+      "version": 1,
+      "disable_existing_loggers": false,
+      "formatters": {
+        "standard": {
+          "format": "%(asctime)s %(levelname)s %(name)s %(message)s"
+        }
+      },
+      "handlers": {
+        "console": {
+          "class": "logging.StreamHandler",
+          "formatter": "standard",
+          "stream": "ext://sys.stdout"
+        }
+      },
+      "root": {
+        "handlers": ["console"],
+        "level": "INFO"
+      }
+    }
+
+  # Example queue config — copy this pattern for each course queue.
+  # Real configs live in conf.d/ mounted from a separate ConfigMap or Secret.
+  example-queue.json.sample: |
+    {
+      "my-course-queue": {
+        "SERVER": "http://xqueue:18040",
+        "CONNECTIONS": 2,
+        "AUTH": ["xqueue_user", "xqueue_pass"],
+        "HANDLERS": [
+          {
+            "HANDLER": "xqueue_watcher.containergrader.ContainerGrader",
+            "KWARGS": {
+              "grader_root": "/graders/my-course/",
+              "image": "registry.example.com/my-course-grader:latest",
+              "backend": "kubernetes",
+              "namespace": "xqueue-watcher",
+              "cpu_limit": "500m",
+              "memory_limit": "256Mi",
+              "timeout": 20
+            }
+          }
+        ]
+      }
+    }
+---
+# Queue-specific configurations: one JSON file per course queue.
+# Operators replace or extend this with real queue names, server URLs,
+# and grader images.  AUTH credentials should be injected from a Secret
+# (e.g., via Vault Secrets Operator) rather than stored in this ConfigMap.
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: xqueue-watcher-queue-configs
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: queue-config
+data:
+  # Replace with your actual queue configs.  Each key becomes a file in
+  # /etc/xqueue-watcher/conf.d/ and must end in .json to be picked up.
+  example-queue.json: |
+    {
+      "my-course-queue": {
+        "SERVER": "http://xqueue:18040",
+        "CONNECTIONS": 2,
+        "AUTH": ["xqueue_user", "xqueue_pass"],
+        "HANDLERS": [
+          {
+            "HANDLER": "xqueue_watcher.containergrader.ContainerGrader",
+            "KWARGS": {
+              "grader_root": "/graders/my-course/",
+              "image": "registry.example.com/my-course-grader:latest",
+              "backend": "kubernetes",
+              "namespace": "xqueue-watcher",
+              "cpu_limit": "500m",
+              "memory_limit": "256Mi",
+              "timeout": 20
+            }
+          }
+        ]
+      }
+    }
diff --git a/deploy/kubernetes/deployment.yaml b/deploy/kubernetes/deployment.yaml
new file mode 100644
index 0000000..df736ac
--- /dev/null
+++ b/deploy/kubernetes/deployment.yaml
@@ -0,0 +1,93 @@
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: xqueue-watcher
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
+spec:
+  # Scale horizontally by increasing replicas. Each replica polls xqueue
+  # independently — no coordination is required between replicas.
+  replicas: 2
+  selector:
+    matchLabels:
+      app.kubernetes.io/name: xqueue-watcher
+      app.kubernetes.io/component: watcher
+  template:
+    metadata:
+      labels:
+        app.kubernetes.io/name: xqueue-watcher
+        app.kubernetes.io/component: watcher
+    spec:
+      serviceAccountName: xqueue-watcher
+
+      # Spread replicas across nodes for availability
+      topologySpreadConstraints:
+        - maxSkew: 1
+          topologyKey: kubernetes.io/hostname
+          whenUnsatisfiable: ScheduleAnyway
+          labelSelector:
+            matchLabels:
+              app.kubernetes.io/name: xqueue-watcher
+
+      containers:
+        - name: xqueue-watcher
+          image: registry.example.com/xqueue-watcher:latest
+          imagePullPolicy: Always
+          command: ["xqueue-watcher", "-d", "/etc/xqueue-watcher"]
+
+          resources:
+            requests:
+              cpu: "100m"
+              memory: "128Mi"
+            limits:
+              cpu: "500m"
+              memory: "512Mi"
+
+          volumeMounts:
+            # Main watcher config (xqwatcher.json + logging.json)
+            - name: config
+              mountPath: /etc/xqueue-watcher
+              readOnly: true
+            # Queue-specific conf.d configs (one JSON file per course queue)
+            - name: queue-configs
+              mountPath: /etc/xqueue-watcher/conf.d
+              readOnly: true
+
+          securityContext:
+            allowPrivilegeEscalation: false
+            readOnlyRootFilesystem: true
+            runAsNonRoot: true
+            runAsUser: 1000
+            capabilities:
+              drop: ["ALL"]
+
+          # Basic liveness: the process exits on fatal errors, so k8s will restart it.
+          # A more sophisticated probe could hit a /healthz endpoint if one is added.
+          livenessProbe:
+            exec:
+              command: ["python", "-c", "import xqueue_watcher"]
+            initialDelaySeconds: 10
+            periodSeconds: 30
+            failureThreshold: 3
+
+      volumes:
+        - name: config
+          configMap:
+            name: xqueue-watcher-config
+            items:
+              - key: xqwatcher.json
+                path: xqwatcher.json
+              - key: logging.json
+                path: logging.json
+        - name: queue-configs
+          # Queue-specific configs live in a separate ConfigMap so course teams
+          # can update them independently of the main watcher config.
+          # Replace with a Secret if the configs contain credentials.
+          # In practice, AUTH credentials should come from a Secret and be
+          # mounted separately or passed as environment variables.
+          configMap:
+            name: xqueue-watcher-queue-configs
+
+      restartPolicy: Always
diff --git a/deploy/kubernetes/kustomization.yaml b/deploy/kubernetes/kustomization.yaml
new file mode 100644
index 0000000..23b7ddc
--- /dev/null
+++ b/deploy/kubernetes/kustomization.yaml
@@ -0,0 +1,25 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+
+namespace: xqueue-watcher
+
+resources:
+  - serviceaccount.yaml
+  - rbac.yaml
+  - configmap.yaml
+  - deployment.yaml
+  - networkpolicy.yaml
+
+# Override the image tag for a specific environment by adding a patch in an
+# overlay directory. Example overlay (deploy/kubernetes/overlays/production/):
+#
+#   kustomization.yaml:
+#     resources:
+#       - ../../
+#     images:
+#       - name: registry.example.com/xqueue-watcher
+#         newTag: "v1.2.3"
+#
+images:
+  - name: registry.example.com/xqueue-watcher
+    newTag: latest
diff --git a/deploy/kubernetes/networkpolicy.yaml b/deploy/kubernetes/networkpolicy.yaml
new file mode 100644
index 0000000..c591138
--- /dev/null
+++ b/deploy/kubernetes/networkpolicy.yaml
@@ -0,0 +1,19 @@
+# Deny all egress from grading Job pods.
+# xqueue-watcher pods themselves still need egress to reach the xqueue server.
+apiVersion: networking.k8s.io/v1
+kind: NetworkPolicy
+metadata:
+  name: deny-grader-egress
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: network-policy
+spec:
+  podSelector:
+    matchLabels:
+      app.kubernetes.io/component: xqueue-grader
+  policyTypes:
+    - Egress
+  # No egress rules = deny all outbound traffic from grader pods.
+  # Student code cannot make network calls, exfiltrate data, or reach external services.
+  egress: []
diff --git a/deploy/kubernetes/rbac.yaml b/deploy/kubernetes/rbac.yaml
new file mode 100644
index 0000000..5a18123
--- /dev/null
+++ b/deploy/kubernetes/rbac.yaml
@@ -0,0 +1,37 @@
+apiVersion: rbac.authorization.k8s.io/v1
+kind: Role
+metadata:
+  name: xqueue-watcher-grader
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
+rules:
+  # Create and manage grading Jobs
+  - apiGroups: ["batch"]
+    resources: ["jobs"]
+    verbs: ["create", "get", "list", "watch", "delete"]
+  # Read pod logs to collect grading results
+  - apiGroups: [""]
+    resources: ["pods"]
+    verbs: ["get", "list", "watch"]
+  - apiGroups: [""]
+    resources: ["pods/log"]
+    verbs: ["get"]
+---
+apiVersion: rbac.authorization.k8s.io/v1
+kind: RoleBinding
+metadata:
+  name: xqueue-watcher-grader
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
+subjects:
+  - kind: ServiceAccount
+    name: xqueue-watcher
+    namespace: xqueue-watcher
+roleRef:
+  kind: Role
+  apiGroup: rbac.authorization.k8s.io
+  name: xqueue-watcher-grader
diff --git a/deploy/kubernetes/secret.yaml.template b/deploy/kubernetes/secret.yaml.template
new file mode 100644
index 0000000..0a6fe3c
--- /dev/null
+++ b/deploy/kubernetes/secret.yaml.template
@@ -0,0 +1,15 @@
+# Secret template — do NOT commit real values.
+# Copy this to secret.yaml.local (gitignored) and fill in real values,
+# or provision via your secrets management tool (Vault, AWS Secrets Manager, etc.)
+apiVersion: v1
+kind: Secret
+metadata:
+  name: xqueue-watcher-secrets
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
+type: Opaque
+stringData:
+  # New Relic license key (only required if using the production newrelic extra)
+  new-relic-license-key: "REPLACE_ME"
diff --git a/deploy/kubernetes/serviceaccount.yaml b/deploy/kubernetes/serviceaccount.yaml
new file mode 100644
index 0000000..1abe93b
--- /dev/null
+++ b/deploy/kubernetes/serviceaccount.yaml
@@ -0,0 +1,8 @@
+apiVersion: v1
+kind: ServiceAccount
+metadata:
+  name: xqueue-watcher
+  namespace: xqueue-watcher
+  labels:
+    app.kubernetes.io/name: xqueue-watcher
+    app.kubernetes.io/component: watcher
diff --git a/docker-compose.yml b/docker-compose.yml
new file mode 100644
index 0000000..ec3475a
--- /dev/null
+++ b/docker-compose.yml
@@ -0,0 +1,45 @@
+services:
+  # xqueue: the submission queue that xqueue-watcher polls.
+  # Uses the official Open edX xqueue image.
+  xqueue:
+    image: openedx/xqueue:latest
+    ports:
+      - "18040:18040"
+    environment:
+      DJANGO_SETTINGS_MODULE: xqueue.settings.devstack
+      XQUEUE_DJANGO_SECRET_KEY: dev-secret-key
+    healthcheck:
+      test: ["CMD", "curl", "-sf", "http://localhost:18040/xqueue/status/"]
+      interval: 10s
+      timeout: 5s
+      retries: 5
+
+  # xqueue-watcher: polls xqueue and routes submissions to the grader.
+  xqueue-watcher:
+    build:
+      context: .
+      dockerfile: Dockerfile
+    depends_on:
+      xqueue:
+        condition: service_healthy
+    volumes:
+      # Mount the local conf.d so you can edit queue configs without rebuilding.
+      - ./conf.d:/etc/xqueue-watcher/conf.d:rw
+      # Mount local grader scripts for rapid iteration.
+      - ./data:/graders:rw
+      # Give xqueue-watcher access to the Docker socket so it can spawn grader containers.
+      - /var/run/docker.sock:/var/run/docker.sock
+    extra_hosts:
+      - "host.docker.internal:host-gateway"
+    command: xqueue-watcher -d /etc/xqueue-watcher
+
+  # sample-grader: an example grader image for local testing.
+  # Course teams replace this with their own image.
+  sample-grader:
+    build:
+      context: .
+      dockerfile: grader_support/Dockerfile.base
+    image: grader-base:local
+    # This service is not started automatically — it exists so `docker compose build`
+    # builds the base image that course grader images extend.
+    profiles: ["build-only"]
diff --git a/grader_support/Dockerfile.base b/grader_support/Dockerfile.base
new file mode 100644
index 0000000..5c659e2
--- /dev/null
+++ b/grader_support/Dockerfile.base
@@ -0,0 +1,22 @@
+FROM python:3.11-slim AS grader-base
+
+# Create a non-root user for running student code
+RUN useradd -m -u 1000 --shell /bin/false grader
+
+WORKDIR /grader
+
+# Install minimal runtime dependency needed by grader_support
+RUN pip install --no-cache-dir path-py
+
+# Copy the grader_support framework into the image
+COPY grader_support/ ./grader_support/
+
+# /tmp is always writable (tmpfs) even with read_only_root_filesystem=true.
+# Student submission files are written there by the entrypoint.
+VOLUME ["/tmp"]
+
+USER grader
+
+# The entrypoint reads SUBMISSION_CODE from the environment, writes it to /tmp,
+# then invokes grader_support.run and prints JSON results to stdout.
+ENTRYPOINT ["python", "-m", "grader_support.entrypoint"]
diff --git a/grader_support/README.md b/grader_support/README.md
new file mode 100644
index 0000000..f15b4f2
--- /dev/null
+++ b/grader_support/README.md
@@ -0,0 +1,106 @@
+## Grader Base Image
+
+This Dockerfile builds the base image that all course-specific grader images extend.
+
+### What it contains
+
+- Python 3.11 (slim)
+- The `grader_support` package (test framework and runner used by all graders) at `/grader/grader_support/`
+- A non-root `grader` user (UID 1000)
+- An entrypoint that reads student submissions from the `SUBMISSION_CODE` environment variable
+
+### Building
+
+```bash
+docker build -t grader-base:latest -f grader_support/Dockerfile.base .
+```
+
+Or via the Makefile:
+
+```bash
+make docker-build
+```
+
+### Course team usage
+
+Course teams create their own image `FROM grader-base` and add their grader scripts plus any Python dependencies required by the graders.
+
+#### Directory layout inside the container
+
+```
+/grader/                        ← WORKDIR (base image); grader_support lives here
+└── grader_support/             ← test framework (gradelib, run, entrypoint)
+
+/graders/                       ← course grader scripts (course team copies these)
+└── ps01/
+│   └── Problem1/
+│       ├── grade_Problem1.py   ← grader script (defines `grader = Grader()`)
+│       └── answer.py           ← reference solution
+└── ml/
+    └── cluster/
+        └── grade_cluster.py
+```
+
+`grader_root` in the handler config should point to `/graders/` (or a subdirectory of it).  The `SUBMISSION_CODE` env var carries student code; the entrypoint writes it to `/tmp` (a writable tmpfs even when the root filesystem is read-only).
+
+#### Example course Dockerfile
+
+```dockerfile
+# syntax=docker/dockerfile:1
+ARG GRADER_BASE_IMAGE=ghcr.io/mitodl/xqueue-watcher-grader-base:latest
+FROM ${GRADER_BASE_IMAGE}
+
+# pip must run as root; the base image ends with USER grader.
+USER root
+RUN pip install --no-cache-dir numpy==1.26.4 scipy==1.13.0
+
+# Copy grader scripts to /graders/.  Do NOT copy them to /grader/ — that
+# would overwrite the grader_support package from the base image.
+COPY --chown=grader:grader graders/ /graders/
+
+USER grader
+```
+
+#### Example handler config (`conf.d/my-course.json`)
+
+```json
+{
+  "my-course-queue": {
+    "SERVER": "http://xqueue:18040",
+    "CONNECTIONS": 2,
+    "AUTH": ["lms", "lms"],
+    "HANDLERS": [
+      {
+        "HANDLER": "xqueue_watcher.containergrader.ContainerGrader",
+        "KWARGS": {
+          "grader_root": "/graders/",
+          "image": "registry.example.com/my-course-grader:latest",
+          "backend": "kubernetes",
+          "cpu_limit": "500m",
+          "memory_limit": "256Mi",
+          "timeout": 20
+        }
+      }
+    ]
+  }
+}
+```
+
+The `grader` field inside each xqueue submission payload should be a path **relative to `grader_root`**, e.g. `"ps01/Problem1/grade_Problem1.py"`.
+
+### Security properties
+
+Grader containers run with:
+- Non-root user (UID 1000)
+- Read-only root filesystem (`/tmp` is a tmpfs for submission files)
+- No network access (`network_disabled: true` / Kubernetes NetworkPolicy)
+- CPU and memory limits enforced by the container runtime
+- Hard wall-clock timeout via `activeDeadlineSeconds` (Kubernetes) or `timeout` (Docker)
+
+### Important: `gradelib` compatibility
+
+The `grader_support/__init__.py` injects the framework's Python 3 `gradelib` and
+`graderutil` modules into `sys.modules` before any grader file is imported.  This
+means grader scripts that do `from gradelib import *` receive the framework version
+automatically, even if a legacy `gradelib.py` exists elsewhere on disk.  Course teams
+do not need to ship their own copy of `gradelib.py`.
diff --git a/grader_support/entrypoint.py b/grader_support/entrypoint.py
new file mode 100644
index 0000000..e05458a
--- /dev/null
+++ b/grader_support/entrypoint.py
@@ -0,0 +1,174 @@
+"""
+Entrypoint for running the complete grading pipeline inside a container.
+
+The grader scripts (grader file, answer.py) are baked into this image.
+This module reads SUBMISSION_CODE from the environment, runs both the staff
+answer and the student submission through the grader, compares results, and
+prints the final grade as JSON to stdout.
+
+Usage (set by Dockerfile ENTRYPOINT):
+    python -m grader_support.entrypoint GRADER_FILE SEED
+"""
+
+import importlib.util
+import json
+import os
+import sys
+
+
+def main():
+    if len(sys.argv) != 3:
+        print(
+            "Usage: python -m grader_support.entrypoint GRADER_FILE SEED",
+            file=sys.stderr,
+        )
+        sys.exit(1)
+
+    grader_path = sys.argv[1]
+    seed = int(sys.argv[2])
+    submission_code = os.environ.get("SUBMISSION_CODE", "")
+
+    results = {"errors": [], "tests": [], "correct": False, "score": 0}
+
+    # Install gettext into builtins BEFORE loading the grader module.
+    # Grader scripts may call _() at module level (e.g. in input_validators),
+    # so _ must be available before exec_module runs.
+    import gettext
+    lang = os.environ.get("GRADER_LANGUAGE", "en")
+    grader_dir = os.path.dirname(os.path.abspath(grader_path))
+    locale_dir = os.path.join(grader_dir, "conf", "locale")
+    trans = gettext.translation(
+        "graders", localedir=locale_dir, fallback=True, languages=[lang]
+    )
+    trans.install(names=None)
+
+    # Load the grader module to access test definitions, preprocessors, and
+    # input validators.  The grader script is baked into this image.
+    spec = importlib.util.spec_from_file_location("grader_module", grader_path)
+    grader_module_obj = importlib.util.module_from_spec(spec)
+    spec.loader.exec_module(grader_module_obj)
+    grader = grader_module_obj.grader
+
+    # Validate submission format before doing any work.
+    errors = grader.input_errors(submission_code)
+    if errors:
+        results["errors"].extend(errors)
+        print(json.dumps(results))
+        return
+
+    # Preprocess both the staff answer and the student submission.
+    answer_path = os.path.join(grader_dir, "answer.py")
+    with open(answer_path, "rb") as f:
+        answer = f.read().decode("utf-8")
+
+    # Normalize tabs to spaces before preprocessing.  Many course grader files
+    # were authored for Python 2 which tolerated mixed tab/space indentation;
+    # Python 3's exec raises TabError on such code.
+    answer = answer.expandtabs(4)
+    submission_code = submission_code.expandtabs(4)
+
+    processed_answer = "# coding: utf8\n" + grader.preprocess(answer)
+    processed_submission = "# coding: utf8\n" + grader.preprocess(submission_code)
+
+    # Write to /tmp, which is backed by an emptyDir volume mount in Kubernetes
+    # (readOnlyRootFilesystem=True prevents writes to the root FS).
+    with open("/tmp/answer.py", "w", encoding="utf-8") as f:
+        f.write(processed_answer)
+    with open("/tmp/submission.py", "w", encoding="utf-8") as f:
+        f.write(processed_submission)
+
+    # Make /tmp and the grader directory importable so run.py can find them.
+    sys.path.insert(0, "/tmp")
+    sys.path.insert(0, grader_dir)
+
+    from . import run as run_module
+    from .gradelib import EndTest
+
+    grader_name = os.path.splitext(os.path.basename(grader_path))[0]
+
+    # Run the staff answer first to get expected outputs.
+    expected_output = run_module.run(grader_name, "answer", seed)
+    expected_ok = (
+        not expected_output["exceptions"]
+        and expected_output["grader"]["status"] == "ok"
+        and expected_output["submission"]["status"] == "ok"
+    )
+    if not expected_ok:
+        results["errors"].append(
+            "There was a problem running the staff solution (Staff debug)."
+        )
+        print(json.dumps(results))
+        return
+
+    # Run the student submission.
+    actual_output = run_module.run(grader_name, "submission", seed)
+    actual_ok = actual_output["grader"]["status"] == "ok"
+
+    if actual_output["submission"]["status"] != "ok":
+        shown_error = actual_output["submission"].get("exception") or (
+            "There was an error thrown while running your solution."
+        )
+        results["errors"].append(shown_error)
+        actual_ok = False
+
+    if not actual_ok:
+        results["errors"].append("We couldn't run your solution (Staff debug).")
+        print(json.dumps(results))
+        return
+
+    # Compare test results.
+    expected_results = expected_output["results"]
+    actual_results = actual_output["results"]
+
+    if len(expected_results) != len(actual_results):
+        results["errors"].append(
+            "Something went wrong: different numbers of tests ran for "
+            "your code and for our reference code."
+        )
+        print(json.dumps(results))
+        return
+
+    hide_output = os.environ.get("HIDE_OUTPUT", "").lower() in ("1", "true", "yes")
+    TOO_LONG = 5000
+    corrects = []
+
+    for test, exp, act in zip(grader.tests(), expected_results, actual_results):
+        exp_short, exp_long, exp_out = exp
+        act_short, act_long, act_out = act
+
+        if exp_short != act_short:
+            results["errors"].append("Something went wrong: tests don't match up.")
+            print(json.dumps(results))
+            return
+
+        if len(act_out) > TOO_LONG:
+            act_out = act_out[:TOO_LONG] + "...OUTPUT TRUNCATED"
+
+        try:
+            correct = test.compare_results(exp_out, act_out)
+        except EndTest as e:
+            if e is not None:
+                act_out += f"\n*** ERROR: {e} ***"
+            correct = False
+
+        corrects.append(correct)
+        if not hide_output:
+            results["tests"].append(
+                (exp_short, exp_long, correct, exp_out, act_out)
+            )
+
+    n = len(corrects)
+    results["correct"] = all(corrects) and n > 0
+    results["score"] = float(sum(corrects)) / n if n > 0 else 0
+
+    if n == 0 and not results["errors"]:
+        results["errors"] = [
+            "There was a problem while running your code (Staff debug). "
+            "Please contact the course staff for assistance."
+        ]
+
+    print(json.dumps(results))
+
+
+if __name__ == "__main__":
+    main()
diff --git a/load_test/run.py b/load_test/run.py
index dc10d98..1eb6027 100644
--- a/load_test/run.py
+++ b/load_test/run.py
@@ -7,7 +7,7 @@
 import json
 import tempfile
 import getpass
-from path import Path
+from pathlib import Path
 import pprint
 import argparse
 
@@ -20,7 +20,7 @@
             {
                 "HANDLER": "xqueue_watcher.jailedgrader.JailedGrader",
                 "KWARGS": {
-                    "grader_root": Path(__file__).dirname() / "../../data/6.00x/graders/",
+                    "grader_root": Path(__file__).parent / "../../data/6.00x/graders/",
                 }
             }
         ]
diff --git a/pyproject.toml b/pyproject.toml
new file mode 100644
index 0000000..5b19727
--- /dev/null
+++ b/pyproject.toml
@@ -0,0 +1,42 @@
+[build-system]
+requires = ["hatchling"]
+build-backend = "hatchling.build"
+
+[project]
+name = "xqueue-watcher"
+version = "0.3"
+description = "XQueue Pull Grader"
+readme = "README.md"
+requires-python = ">=3.11"
+license = { file = "LICENSE.TXT" }
+dependencies = [
+    "docker>=7.0.0",
+    "kubernetes>=29.0.0",
+    "opentelemetry-api",
+    "opentelemetry-exporter-otlp-proto-http",
+    "opentelemetry-sdk",
+    "requests",
+]
+
+[project.optional-dependencies]
+codejail = [
+    "edx-codejail",
+]
+
+[project.scripts]
+xqueue-watcher = "xqueue_watcher.manager:main"
+
+[dependency-groups]
+dev = [
+    "coverage",
+    "edx-codejail",
+    "mock",
+    "pytest-cov",
+]
+
+[tool.uv]
+package = true
+default-groups = ["dev"]
+
+[tool.hatch.build.targets.wheel]
+packages = ["xqueue_watcher", "grader_support"]
diff --git a/requirements/base.in b/requirements/base.in
deleted file mode 100644
index b8c4b5d..0000000
--- a/requirements/base.in
+++ /dev/null
@@ -1,10 +0,0 @@
-# Core requirements for using this package
-
--c constraints.txt
-
-dogstatsd-python
-path.py
-requests
-six
-
--e git+https://github.com/openedx/codejail.git@4127fc4bd5775cc72aee8d7f0a70e31405e22439#egg=codejail
diff --git a/requirements/base.txt b/requirements/base.txt
deleted file mode 100644
index efc6c39..0000000
--- a/requirements/base.txt
+++ /dev/null
@@ -1,26 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
--e git+https://github.com/openedx/codejail.git@4127fc4bd5775cc72aee8d7f0a70e31405e22439#egg=codejail
-    # via -r requirements/base.in
-certifi==2026.2.25
-    # via requests
-charset-normalizer==3.4.5
-    # via requests
-dogstatsd-python==0.5.6
-    # via -r requirements/base.in
-idna==3.11
-    # via requests
-path==17.1.1
-    # via path-py
-path-py==12.5.0
-    # via -r requirements/base.in
-requests==2.32.5
-    # via -r requirements/base.in
-six==1.17.0
-    # via -r requirements/base.in
-urllib3==2.6.3
-    # via requests
diff --git a/requirements/ci.in b/requirements/ci.in
deleted file mode 100644
index 44cd1b5..0000000
--- a/requirements/ci.in
+++ /dev/null
@@ -1,6 +0,0 @@
-# Requirements for running tests in CI
--c constraints.txt
-
--r test.txt
-
-coverage
diff --git a/requirements/ci.txt b/requirements/ci.txt
deleted file mode 100644
index 65193c0..0000000
--- a/requirements/ci.txt
+++ /dev/null
@@ -1,66 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
--e git+https://github.com/openedx/codejail.git@4127fc4bd5775cc72aee8d7f0a70e31405e22439#egg=codejail
-    # via -r requirements/test.txt
-certifi==2026.2.25
-    # via
-    #   -r requirements/test.txt
-    #   requests
-charset-normalizer==3.4.5
-    # via
-    #   -r requirements/test.txt
-    #   requests
-coverage[toml]==7.13.4
-    # via
-    #   -r requirements/ci.in
-    #   -r requirements/test.txt
-    #   pytest-cov
-dogstatsd-python==0.5.6
-    # via -r requirements/test.txt
-idna==3.11
-    # via
-    #   -r requirements/test.txt
-    #   requests
-iniconfig==2.3.0
-    # via
-    #   -r requirements/test.txt
-    #   pytest
-mock==5.2.0
-    # via -r requirements/test.txt
-packaging==26.0
-    # via
-    #   -r requirements/test.txt
-    #   pytest
-path==17.1.1
-    # via
-    #   -r requirements/test.txt
-    #   path-py
-path-py==12.5.0
-    # via -r requirements/test.txt
-pluggy==1.6.0
-    # via
-    #   -r requirements/test.txt
-    #   pytest
-    #   pytest-cov
-pygments==2.19.2
-    # via
-    #   -r requirements/test.txt
-    #   pytest
-pytest==9.0.2
-    # via
-    #   -r requirements/test.txt
-    #   pytest-cov
-pytest-cov==7.0.0
-    # via -r requirements/test.txt
-requests==2.32.5
-    # via -r requirements/test.txt
-six==1.17.0
-    # via -r requirements/test.txt
-urllib3==2.6.3
-    # via
-    #   -r requirements/test.txt
-    #   requests
diff --git a/requirements/common_constraints.txt b/requirements/common_constraints.txt
deleted file mode 100644
index 72cc4cc..0000000
--- a/requirements/common_constraints.txt
+++ /dev/null
@@ -1,20 +0,0 @@
-# A central location for most common version constraints
-# (across edx repos) for pip-installation.
-#
-# Similar to other constraint files this file doesn't install any packages.
-# It specifies version constraints that will be applied if a package is needed.
-# When pinning something here, please provide an explanation of why it is a good
-# idea to pin this package across all edx repos, Ideally, link to other information
-# that will help people in the future to remove the pin when possible.
-# Writing an issue against the offending project and linking to it here is good.
-#
-# Note: Changes to this file will automatically be used by other repos, referencing
-#  this file from Github directly. It does not require packaging in edx-lint.
-
-# using LTS django version
-Django<6.0
-
-# elasticsearch>=7.14.0 includes breaking changes in it which caused issues in discovery upgrade process.
-# elastic search changelog: https://www.elastic.co/guide/en/enterprise-search/master/release-notes-7.14.0.html
-# See https://github.com/openedx/edx-platform/issues/35126 for more info
-elasticsearch<7.14.0
diff --git a/requirements/constraints.txt b/requirements/constraints.txt
deleted file mode 100644
index 9d005a4..0000000
--- a/requirements/constraints.txt
+++ /dev/null
@@ -1,11 +0,0 @@
-# Version constraints for pip-installation.
-#
-# This file doesn't install any packages. It specifies version constraints
-# that will be applied if a package is needed.
-#
-# When pinning something here, please provide an explanation of why.  Ideally,
-# link to other information that will help people in the future to remove the
-# pin when possible.  Writing an issue against the offending project and
-# linking to it here is good.
-
--c common_constraints.txt
\ No newline at end of file
diff --git a/requirements/pip.in b/requirements/pip.in
deleted file mode 100644
index 715478c..0000000
--- a/requirements/pip.in
+++ /dev/null
@@ -1,7 +0,0 @@
--c constraints.txt
-# Core dependencies for installing other packages
-
-pip
-setuptools
-wheel
-
diff --git a/requirements/pip.txt b/requirements/pip.txt
deleted file mode 100644
index 084d708..0000000
--- a/requirements/pip.txt
+++ /dev/null
@@ -1,16 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
-packaging==26.0
-    # via wheel
-wheel==0.46.3
-    # via -r requirements/pip.in
-
-# The following packages are considered to be unsafe in a requirements file:
-pip==26.0.1
-    # via -r requirements/pip.in
-setuptools==82.0.0
-    # via -r requirements/pip.in
diff --git a/requirements/pip_tools.in b/requirements/pip_tools.in
deleted file mode 100644
index caf45a9..0000000
--- a/requirements/pip_tools.in
+++ /dev/null
@@ -1,4 +0,0 @@
- # Dependencies to run compile tools
--c constraints.txt
-
-pip-tools                           # Contains pip-compile, used to generate pip requirements files
diff --git a/requirements/pip_tools.txt b/requirements/pip_tools.txt
deleted file mode 100644
index 107789a..0000000
--- a/requirements/pip_tools.txt
+++ /dev/null
@@ -1,26 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
-build==1.4.0
-    # via pip-tools
-click==8.3.1
-    # via pip-tools
-packaging==26.0
-    # via
-    #   build
-    #   wheel
-pip-tools==7.5.3
-    # via -r requirements/pip_tools.in
-pyproject-hooks==1.2.0
-    # via
-    #   build
-    #   pip-tools
-wheel==0.46.3
-    # via pip-tools
-
-# The following packages are considered to be unsafe in a requirements file:
-# pip
-# setuptools
diff --git a/requirements/production.in b/requirements/production.in
deleted file mode 100644
index b739cac..0000000
--- a/requirements/production.in
+++ /dev/null
@@ -1,5 +0,0 @@
-# Production requirements for using this package
-
--c constraints.txt
-
--r base.txt
diff --git a/requirements/production.txt b/requirements/production.txt
deleted file mode 100644
index d60125e..0000000
--- a/requirements/production.txt
+++ /dev/null
@@ -1,36 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
--e git+https://github.com/openedx/codejail.git@4127fc4bd5775cc72aee8d7f0a70e31405e22439#egg=codejail
-    # via -r requirements/base.txt
-certifi==2026.2.25
-    # via
-    #   -r requirements/base.txt
-    #   requests
-charset-normalizer==3.4.5
-    # via
-    #   -r requirements/base.txt
-    #   requests
-dogstatsd-python==0.5.6
-    # via -r requirements/base.txt
-idna==3.11
-    # via
-    #   -r requirements/base.txt
-    #   requests
-path==17.1.1
-    # via
-    #   -r requirements/base.txt
-    #   path-py
-path-py==12.5.0
-    # via -r requirements/base.txt
-requests==2.32.5
-    # via -r requirements/base.txt
-six==1.17.0
-    # via -r requirements/base.txt
-urllib3==2.6.3
-    # via
-    #   -r requirements/base.txt
-    #   requests
diff --git a/requirements/test.in b/requirements/test.in
deleted file mode 100644
index a536201..0000000
--- a/requirements/test.in
+++ /dev/null
@@ -1,8 +0,0 @@
-# Requirements for test runs
-
--c constraints.txt
-
--r production.txt
-
-mock
-pytest-cov
diff --git a/requirements/test.txt b/requirements/test.txt
deleted file mode 100644
index 6ef7fc0..0000000
--- a/requirements/test.txt
+++ /dev/null
@@ -1,54 +0,0 @@
-#
-# This file is autogenerated by pip-compile with Python 3.12
-# by the following command:
-#
-#    make upgrade
-#
--e git+https://github.com/openedx/codejail.git@4127fc4bd5775cc72aee8d7f0a70e31405e22439#egg=codejail
-    # via -r requirements/production.txt
-certifi==2026.2.25
-    # via
-    #   -r requirements/production.txt
-    #   requests
-charset-normalizer==3.4.5
-    # via
-    #   -r requirements/production.txt
-    #   requests
-coverage[toml]==7.13.4
-    # via pytest-cov
-dogstatsd-python==0.5.6
-    # via -r requirements/production.txt
-idna==3.11
-    # via
-    #   -r requirements/production.txt
-    #   requests
-iniconfig==2.3.0
-    # via pytest
-mock==5.2.0
-    # via -r requirements/test.in
-packaging==26.0
-    # via pytest
-path==17.1.1
-    # via
-    #   -r requirements/production.txt
-    #   path-py
-path-py==12.5.0
-    # via -r requirements/production.txt
-pluggy==1.6.0
-    # via
-    #   pytest
-    #   pytest-cov
-pygments==2.19.2
-    # via pytest
-pytest==9.0.2
-    # via pytest-cov
-pytest-cov==7.0.0
-    # via -r requirements/test.in
-requests==2.32.5
-    # via -r requirements/production.txt
-six==1.17.0
-    # via -r requirements/production.txt
-urllib3==2.6.3
-    # via
-    #   -r requirements/production.txt
-    #   requests
diff --git a/setup.py b/setup.py
deleted file mode 100644
index d8ce0ec..0000000
--- a/setup.py
+++ /dev/null
@@ -1,14 +0,0 @@
-from setuptools import setup
-
-
-setup(
-    name='xqueue_watcher',
-    version='1.0.0',
-    description='XQueue Pull Grader',
-    packages=[
-        'grader_support',
-        'xqueue_watcher',
-    ],
-    install_requires=open('requirements/production.txt',
-                          'rt', encoding='utf-8').readlines(),
-)
diff --git a/tests/test_container_grader.py b/tests/test_container_grader.py
new file mode 100644
index 0000000..87a26df
--- /dev/null
+++ b/tests/test_container_grader.py
@@ -0,0 +1,347 @@
+"""
+Unit tests for ContainerGrader.
+
+Uses mock objects for the Docker SDK and kubernetes client to test container
+execution paths without requiring a live Docker daemon or cluster.
+"""
+
+import json
+from pathlib import Path
+from unittest import mock
+from unittest.mock import patch
+
+import pytest
+
+from xqueue_watcher.containergrader import ContainerGrader, _parse_cpu_millis, _parse_memory_bytes
+
+
+# ---------------------------------------------------------------------------
+# Helpers
+# ---------------------------------------------------------------------------
+
+def make_grader(backend="docker", **kwargs):
+    defaults = dict(grader_root="/graders", image="course-grader:v1", backend=backend)
+    defaults.update(kwargs)
+    return ContainerGrader(**defaults)
+
+
+# ---------------------------------------------------------------------------
+# _parse_cpu_millis
+# ---------------------------------------------------------------------------
+
+class TestParseCpuMillis:
+    def test_millicores(self):
+        assert _parse_cpu_millis("500m") == 500.0
+
+    def test_whole_cores(self):
+        assert _parse_cpu_millis("2") == 2000.0
+
+    def test_fractional_cores(self):
+        assert _parse_cpu_millis("0.5") == 500.0
+
+
+# ---------------------------------------------------------------------------
+# ContainerGrader.__init__
+# ---------------------------------------------------------------------------
+
+class TestContainerGraderInit:
+    def test_valid_kubernetes_backend(self):
+        g = make_grader(backend="kubernetes")
+        assert g.backend == "kubernetes"
+
+    def test_valid_docker_backend(self):
+        g = make_grader(backend="docker")
+        assert g.backend == "docker"
+
+    def test_invalid_backend(self):
+        with pytest.raises(ValueError, match="Unsupported backend"):
+            make_grader(backend="podman")
+
+    def test_defaults_from_env_when_no_kwargs(self):
+        """With no kwargs, values come from env defaults (all at baseline)."""
+        g = ContainerGrader(grader_root="/graders", image="img:latest")
+        assert g.backend == "kubernetes"
+        assert g.namespace == "default"
+        assert g.cpu_limit == "500m"
+        assert g.memory_limit == "256Mi"
+        assert g.timeout == 20
+
+    def test_kwargs_override_env_defaults(self):
+        """Explicit kwargs always win over env defaults."""
+        env = {
+            "XQWATCHER_GRADER_BACKEND": "docker",
+            "XQWATCHER_GRADER_NAMESPACE": "env-ns",
+            "XQWATCHER_GRADER_CPU_LIMIT": "250m",
+            "XQWATCHER_GRADER_MEMORY_LIMIT": "128Mi",
+            "XQWATCHER_GRADER_TIMEOUT": "5",
+        }
+        with patch.dict("os.environ", env):
+            g = ContainerGrader(
+                grader_root="/graders",
+                image="img:latest",
+                backend="kubernetes",
+                namespace="kwarg-ns",
+                cpu_limit="1000m",
+                memory_limit="512Mi",
+                timeout=99,
+            )
+        assert g.backend == "kubernetes"
+        assert g.namespace == "kwarg-ns"
+        assert g.cpu_limit == "1000m"
+        assert g.memory_limit == "512Mi"
+        assert g.timeout == 99
+
+    def test_env_defaults_applied_when_no_kwargs(self):
+        """Env vars are used when the corresponding kwarg is absent."""
+        env = {
+            "XQWATCHER_GRADER_BACKEND": "docker",
+            "XQWATCHER_GRADER_NAMESPACE": "grading",
+            "XQWATCHER_GRADER_CPU_LIMIT": "750m",
+            "XQWATCHER_GRADER_MEMORY_LIMIT": "512Mi",
+            "XQWATCHER_GRADER_TIMEOUT": "30",
+        }
+        with patch.dict("os.environ", env):
+            g = ContainerGrader(grader_root="/graders", image="img:latest")
+        assert g.backend == "docker"
+        assert g.namespace == "grading"
+        assert g.cpu_limit == "750m"
+        assert g.memory_limit == "512Mi"
+        assert g.timeout == 30
+
+    def test_invalid_backend_from_env_raises(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_BACKEND": "podman"}):
+            with pytest.raises(ValueError, match="Unsupported backend"):
+                ContainerGrader(grader_root="/graders", image="img:latest")
+
+
+# ---------------------------------------------------------------------------
+# _build_k8s_job
+# ---------------------------------------------------------------------------
+
+class TestBuildK8sJob:
+    def setup_method(self):
+        self.grader = make_grader(
+            backend="kubernetes",
+            namespace="test-ns",
+            cpu_limit="1000m",
+            memory_limit="512Mi",
+            timeout=30,
+        )
+
+    def _build(self, job_name="test-job", grader_path="/graders/grade.py", code="code", seed=42):
+        return self.grader._build_k8s_job(job_name, grader_path, code, seed)
+
+    def test_job_name(self):
+        job = self._build(job_name="xqueue-grader-abc123")
+        assert job.metadata.name == "xqueue-grader-abc123"
+
+    def test_image(self):
+        job = self._build()
+        assert job.spec.template.spec.containers[0].image == "course-grader:v1"
+
+    def test_args_are_grader_and_seed(self):
+        # entrypoint takes GRADER_FILE SEED (no submission.py positional arg)
+        job = self._build(grader_path="/graders/ps07/grade.py", seed=99)
+        assert job.spec.template.spec.containers[0].args == ["/graders/ps07/grade.py", "99"]
+
+    def test_submission_code_env(self):
+        job = self._build(code="x = 1")
+        env = {e.name: e.value for e in job.spec.template.spec.containers[0].env}
+        assert env["SUBMISSION_CODE"] == "x = 1"
+
+    def test_grader_language_env_default(self):
+        job = self._build()
+        env = {e.name: e.value for e in job.spec.template.spec.containers[0].env}
+        assert env["GRADER_LANGUAGE"] == "en"
+
+    def test_grader_language_from_config(self):
+        job = self.grader._build_k8s_job("job", "/g/grade.py", "code", 1, {"lang": "fr"})
+        env = {e.name: e.value for e in job.spec.template.spec.containers[0].env}
+        assert env["GRADER_LANGUAGE"] == "fr"
+
+    def test_hide_output_env_default_off(self):
+        job = self._build()
+        env = {e.name: e.value for e in job.spec.template.spec.containers[0].env}
+        assert env["HIDE_OUTPUT"] == "0"
+
+    def test_hide_output_env_when_set(self):
+        job = self.grader._build_k8s_job("job", "/g/grade.py", "code", 1, {"hide_output": True})
+        env = {e.name: e.value for e in job.spec.template.spec.containers[0].env}
+        assert env["HIDE_OUTPUT"] == "1"
+
+    def test_resource_limits(self):
+        job = self._build()
+        limits = job.spec.template.spec.containers[0].resources.limits
+        assert limits["cpu"] == "1000m"
+        assert limits["memory"] == "512Mi"
+
+    def test_tmp_empty_dir_volume_present(self):
+        job = self._build()
+        volumes = job.spec.template.spec.volumes
+        tmp_vol = next((v for v in volumes if v.name == "tmp"), None)
+        assert tmp_vol is not None, "emptyDir volume at /tmp is required"
+        assert tmp_vol.empty_dir is not None
+
+    def test_tmp_volume_mounted_at_tmp(self):
+        job = self._build()
+        mounts = job.spec.template.spec.containers[0].volume_mounts
+        tmp_mount = next((m for m in mounts if m.name == "tmp"), None)
+        assert tmp_mount is not None
+        assert tmp_mount.mount_path == "/tmp"
+
+    def test_read_only_root_filesystem(self):
+        job = self._build()
+        sc = job.spec.template.spec.containers[0].security_context
+        assert sc.read_only_root_filesystem is True
+
+    def test_no_privilege_escalation(self):
+        job = self._build()
+        sc = job.spec.template.spec.containers[0].security_context
+        assert sc.allow_privilege_escalation is False
+
+    def test_backoff_limit_zero(self):
+        job = self._build()
+        assert job.spec.backoff_limit == 0
+
+    def test_active_deadline_matches_timeout(self):
+        job = self._build()
+        assert job.spec.active_deadline_seconds == 30
+
+
+# ---------------------------------------------------------------------------
+# _run_docker
+# ---------------------------------------------------------------------------
+
+def _make_mock_client(exit_code=0, stdout_data=b'{"correct": true}', stderr_data=b""):
+    """Return a (client, container) pair pre-configured with given outputs."""
+    container = mock.MagicMock()
+    container.wait.return_value = {"StatusCode": exit_code}
+
+    def logs_side_effect(stdout=True, stderr=False):
+        if stderr and not stdout:
+            return stderr_data
+        return stdout_data
+
+    container.logs.side_effect = logs_side_effect
+    client = mock.MagicMock()
+    client.containers.run.return_value = container
+    return client, container
+
+
+class TestRunDocker:
+    def setup_method(self):
+        self.grader = make_grader(backend="docker", timeout=10)
+
+    def _run(self, client, code="print('hi')", seed=42, grader_config=None):
+        with mock.patch("docker.from_env", return_value=client):
+            return self.grader._run_docker(
+                "/graders/ps07/grade.py", code, seed, grader_config or {}
+            )
+
+    def test_success_returns_stdout(self):
+        client, _ = _make_mock_client(stdout_data=b'{"correct": true}')
+        result = self._run(client)
+        assert result == b'{"correct": true}'
+
+    def test_container_removed_on_success(self):
+        client, container = _make_mock_client()
+        self._run(client)
+        container.remove.assert_called_once_with(force=True)
+
+    def test_container_removed_on_failure(self):
+        client, container = _make_mock_client(exit_code=1, stderr_data=b"Traceback...")
+        with pytest.raises(RuntimeError):
+            self._run(client)
+        container.remove.assert_called_once_with(force=True)
+
+    def test_non_zero_exit_raises(self):
+        client, _ = _make_mock_client(exit_code=1, stderr_data=b"Error!")
+        with pytest.raises(RuntimeError, match="non-zero status"):
+            self._run(client)
+
+    def test_stderr_included_in_error_message(self):
+        client, _ = _make_mock_client(exit_code=1, stderr_data=b"ImportError: missing module")
+        with pytest.raises(RuntimeError, match="ImportError"):
+            self._run(client)
+
+    def test_timeout_raises_runtime_error(self):
+        client, container = _make_mock_client()
+        container.wait.side_effect = Exception("ReadTimeout")
+        with pytest.raises(RuntimeError, match="timed out"):
+            self._run(client)
+
+    def test_missing_docker_sdk_raises(self):
+        with mock.patch.dict("sys.modules", {"docker": None}):
+            with pytest.raises(RuntimeError, match="'docker' package"):
+                self.grader._run_docker("/graders/grade.py", "code", 1, {})
+
+    def test_string_result_converted_to_bytes(self):
+        client, container = _make_mock_client()
+        container.logs.side_effect = None
+        container.logs.return_value = '{"correct": false}'
+        result = self._run(client)
+        assert isinstance(result, bytes)
+
+    def test_entrypoint_args_are_grader_and_seed(self):
+        """Container command should be [grader_path, seed] — not 3 args."""
+        client, _ = _make_mock_client()
+        self._run(client, seed=99)
+        call_kwargs = client.containers.run.call_args
+        command = call_kwargs.kwargs.get("command") or call_kwargs[1].get("command")
+        assert len(command) == 2
+        assert command[1] == "99"
+
+    def test_grader_language_passed_as_env(self):
+        client, _ = _make_mock_client()
+        self._run(client, grader_config={"lang": "es"})
+        call_kwargs = client.containers.run.call_args
+        env = call_kwargs.kwargs.get("environment") or call_kwargs[1].get("environment")
+        assert env.get("GRADER_LANGUAGE") == "es"
+
+
+# ---------------------------------------------------------------------------
+# grade() public interface
+# ---------------------------------------------------------------------------
+
+class TestGrade:
+    def setup_method(self):
+        self.grader = make_grader()
+
+    def _grade(self, submission="x = 1", grader_config=None):
+        if grader_config is None:
+            grader_config = {}
+        return self.grader.grade(
+            grader_path=Path("/graders/ps07/grade.py"),
+            grader_config=grader_config,
+            submission=submission,
+        )
+
+    def test_skip_grader_returns_correct(self):
+        result = self._grade(grader_config={"skip_grader": True})
+        assert result["correct"] is True
+        assert result["score"] == 1
+
+    def test_container_result_returned_directly(self):
+        grade_json = {"correct": True, "score": 1.0, "errors": [], "tests": []}
+        with mock.patch.object(self.grader, "_run", return_value=json.dumps(grade_json).encode()):
+            result = self._grade()
+        assert result["correct"] is True
+        assert result["score"] == 1.0
+
+    def test_container_failure_returns_error_dict(self):
+        with mock.patch.object(self.grader, "_run", side_effect=RuntimeError("container died")):
+            result = self._grade()
+        assert result["correct"] is False
+        assert result["errors"]
+
+    def test_large_submission_logs_warning(self, caplog):
+        import logging
+        large_code = "x = 1\n" * 10_000  # ~70 KB
+        grade_json = {"correct": False, "score": 0.0, "errors": [], "tests": []}
+        # Mock the backend method so _run() still executes the size check.
+        with mock.patch.object(
+            self.grader, "_run_docker", return_value=json.dumps(grade_json).encode()
+        ):
+            with caplog.at_level(logging.WARNING):
+                self._grade(submission=large_code)
+        assert any("large" in r.message.lower() for r in caplog.records)
diff --git a/tests/test_env_settings.py b/tests/test_env_settings.py
new file mode 100644
index 0000000..fa46951
--- /dev/null
+++ b/tests/test_env_settings.py
@@ -0,0 +1,174 @@
+import logging
+import unittest
+from unittest.mock import patch
+
+from xqueue_watcher.env_settings import configure_logging, get_container_grader_defaults, get_manager_config_from_env
+from xqueue_watcher.settings import MANAGER_CONFIG_DEFAULTS
+
+
+class TestConfigureLogging(unittest.TestCase):
+    def tearDown(self):
+        # Reset root logger after each test so handlers don't accumulate.
+        root = logging.getLogger()
+        root.handlers.clear()
+        root.setLevel(logging.WARNING)
+
+    def test_default_level_is_info(self):
+        with patch.dict("os.environ", {}, clear=False):
+            configure_logging()
+        self.assertEqual(logging.getLogger().level, logging.INFO)
+
+    def test_custom_level_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_LOG_LEVEL": "DEBUG"}):
+            configure_logging()
+        self.assertEqual(logging.getLogger().level, logging.DEBUG)
+
+    def test_stdout_handler_installed(self):
+        import sys
+        with patch.dict("os.environ", {}, clear=False):
+            configure_logging()
+        handlers = logging.getLogger().handlers
+        self.assertEqual(len(handlers), 1)
+        self.assertIsInstance(handlers[0], logging.StreamHandler)
+        self.assertIs(handlers[0].stream, sys.stdout)
+
+    def test_requests_logger_set_to_warning(self):
+        with patch.dict("os.environ", {"XQWATCHER_LOG_LEVEL": "DEBUG"}):
+            configure_logging()
+        self.assertEqual(logging.getLogger("requests").level, logging.WARNING)
+        self.assertEqual(logging.getLogger("urllib3").level, logging.WARNING)
+
+    def test_invalid_level_raises(self):
+        with patch.dict("os.environ", {"XQWATCHER_LOG_LEVEL": "NOTLEVEL"}):
+            with self.assertRaises(ValueError):
+                configure_logging()
+
+
+class TestGetManagerConfigFromEnv(unittest.TestCase):
+    def test_defaults_when_no_env_vars_set(self):
+        with patch.dict("os.environ", {}, clear=False):
+            config = get_manager_config_from_env()
+        self.assertEqual(config, MANAGER_CONFIG_DEFAULTS)
+
+    def test_poll_time_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_POLL_TIME": "30"}):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["POLL_TIME"], 30)
+
+    def test_requests_timeout_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_REQUESTS_TIMEOUT": "5"}):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["REQUESTS_TIMEOUT"], 5)
+
+    def test_poll_interval_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_POLL_INTERVAL": "3"}):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["POLL_INTERVAL"], 3)
+
+    def test_login_poll_interval_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_LOGIN_POLL_INTERVAL": "15"}):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["LOGIN_POLL_INTERVAL"], 15)
+
+    def test_http_basic_auth_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_HTTP_BASIC_AUTH": "user:secret"}):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["HTTP_BASIC_AUTH"], "user:secret")
+
+    def test_http_basic_auth_empty_string_returns_none(self):
+        with patch.dict("os.environ", {"XQWATCHER_HTTP_BASIC_AUTH": ""}):
+            config = get_manager_config_from_env()
+        self.assertIsNone(config["HTTP_BASIC_AUTH"])
+
+    def test_follow_client_redirects_true_values(self):
+        for truthy in ("true", "True", "TRUE", "1", "yes", "YES"):
+            with self.subTest(value=truthy):
+                with patch.dict("os.environ", {"XQWATCHER_FOLLOW_CLIENT_REDIRECTS": truthy}):
+                    config = get_manager_config_from_env()
+                self.assertTrue(config["FOLLOW_CLIENT_REDIRECTS"])
+
+    def test_follow_client_redirects_false_values(self):
+        for falsy in ("false", "False", "FALSE", "0", "no", "NO"):
+            with self.subTest(value=falsy):
+                with patch.dict("os.environ", {"XQWATCHER_FOLLOW_CLIENT_REDIRECTS": falsy}):
+                    config = get_manager_config_from_env()
+                self.assertFalse(config["FOLLOW_CLIENT_REDIRECTS"])
+
+    def test_follow_client_redirects_default_is_false(self):
+        with patch.dict("os.environ", {}, clear=False):
+            config = get_manager_config_from_env()
+        self.assertFalse(config["FOLLOW_CLIENT_REDIRECTS"])
+
+    def test_all_env_vars_together(self):
+        env = {
+            "XQWATCHER_HTTP_BASIC_AUTH": "admin:pass",
+            "XQWATCHER_POLL_TIME": "20",
+            "XQWATCHER_REQUESTS_TIMEOUT": "3",
+            "XQWATCHER_POLL_INTERVAL": "2",
+            "XQWATCHER_LOGIN_POLL_INTERVAL": "10",
+            "XQWATCHER_FOLLOW_CLIENT_REDIRECTS": "true",
+        }
+        with patch.dict("os.environ", env):
+            config = get_manager_config_from_env()
+        self.assertEqual(config["HTTP_BASIC_AUTH"], "admin:pass")
+        self.assertEqual(config["POLL_TIME"], 20)
+        self.assertEqual(config["REQUESTS_TIMEOUT"], 3)
+        self.assertEqual(config["POLL_INTERVAL"], 2)
+        self.assertEqual(config["LOGIN_POLL_INTERVAL"], 10)
+        self.assertTrue(config["FOLLOW_CLIENT_REDIRECTS"])
+
+    def test_returns_all_expected_keys(self):
+        config = get_manager_config_from_env()
+        self.assertEqual(set(config.keys()), set(MANAGER_CONFIG_DEFAULTS.keys()))
+
+
+class TestGetContainerGraderDefaults(unittest.TestCase):
+    def test_built_in_defaults_when_no_env(self):
+        with patch.dict("os.environ", {}, clear=False):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["backend"], "kubernetes")
+        self.assertEqual(d["namespace"], "default")
+        self.assertEqual(d["cpu_limit"], "500m")
+        self.assertEqual(d["memory_limit"], "256Mi")
+        self.assertEqual(d["timeout"], 20)
+
+    def test_backend_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_BACKEND": "docker"}):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["backend"], "docker")
+
+    def test_namespace_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_NAMESPACE": "grading"}):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["namespace"], "grading")
+
+    def test_cpu_limit_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_CPU_LIMIT": "1"}):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["cpu_limit"], "1")
+
+    def test_memory_limit_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_MEMORY_LIMIT": "1Gi"}):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["memory_limit"], "1Gi")
+
+    def test_timeout_from_env(self):
+        with patch.dict("os.environ", {"XQWATCHER_GRADER_TIMEOUT": "60"}):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["timeout"], 60)
+
+    def test_all_grader_env_vars_together(self):
+        env = {
+            "XQWATCHER_GRADER_BACKEND": "docker",
+            "XQWATCHER_GRADER_NAMESPACE": "ci",
+            "XQWATCHER_GRADER_CPU_LIMIT": "250m",
+            "XQWATCHER_GRADER_MEMORY_LIMIT": "128Mi",
+            "XQWATCHER_GRADER_TIMEOUT": "10",
+        }
+        with patch.dict("os.environ", env):
+            d = get_container_grader_defaults()
+        self.assertEqual(d["backend"], "docker")
+        self.assertEqual(d["namespace"], "ci")
+        self.assertEqual(d["cpu_limit"], "250m")
+        self.assertEqual(d["memory_limit"], "128Mi")
+        self.assertEqual(d["timeout"], 10)
diff --git a/tests/test_grader.py b/tests/test_grader.py
index 9093983..97662f1 100644
--- a/tests/test_grader.py
+++ b/tests/test_grader.py
@@ -2,12 +2,12 @@
 from unittest import mock
 import json
 import sys
-from path import Path
+from pathlib import Path
 from queue import Queue
 
 from xqueue_watcher import grader
 
-MYDIR = Path(__file__).dirname() / 'fixtures'
+MYDIR = Path(__file__).parent / 'fixtures'
 
 
 class MockGrader(grader.Grader):
@@ -16,12 +16,12 @@ def grade(self, grader_path, grader_config, student_response):
         errors = []
         correct = 0
         score = 0
-        if grader_path.endswith('/correct'):
+        if grader_path.name == 'correct':
             correct = 1
             score = 1
             tests.append(('short', 'long', True, 'expected', 'actual'))
             tests.append(('short', '', True, 'expected', 'actual'))
-        elif grader_path.endswith('/incorrect'):
+        elif grader_path.name == 'incorrect':
             tests.append(('short', 'long', False, 'expected', 'actual'))
             errors.append('THIS IS AN ERROR')
             errors.append('\x00\xc3\x83\xc3\xb8\x02')
diff --git a/tests/test_jailed_grader.py b/tests/test_jailed_grader.py
index e4ade77..1c989cf 100644
--- a/tests/test_jailed_grader.py
+++ b/tests/test_jailed_grader.py
@@ -3,12 +3,20 @@
 import sys
 import textwrap
 import unittest
-from path import Path
+from pathlib import Path
+
+import pytest
+
+try:
+    from codejail.jail_code import configure
+    HAS_CODEJAIL = True
+except ImportError:
+    HAS_CODEJAIL = False
 
 from xqueue_watcher.jailedgrader import JailedGrader
-from codejail.jail_code import configure
 
 
+@pytest.mark.skipif(not HAS_CODEJAIL, reason="codejail not installed")
 class JailedGraderTests(unittest.TestCase):
     def setUp(self):
         configure("python", sys.executable, user=getpass.getuser())
@@ -21,7 +29,7 @@ def setUp(self):
                     user=getpass.getuser(),
                 )
                 break
-        self.grader_root = Path(__file__).dirname() / 'fixtures'
+        self.grader_root = Path(__file__).parent / 'fixtures'
         self.g = JailedGrader(grader_root=self.grader_root)
         self.g3 = JailedGrader(grader_root=self.grader_root, codejail_python='python3')
 
diff --git a/tests/test_manager.py b/tests/test_manager.py
index f50f0d4..4ff5064 100644
--- a/tests/test_manager.py
+++ b/tests/test_manager.py
@@ -1,5 +1,5 @@
 import unittest
-from path import Path
+from pathlib import Path
 import json
 from unittest.mock import Mock
 import time
@@ -90,8 +90,11 @@ def test_codejail_config(self):
             })
         self.assertTrue(codejail.jail_code.is_configured("other-python"))
 
-        # now we'll see if the codejail config is inherited in the handler subprocess
+        # Verify codejail config is visible to the grader running in the same process.
+        # (fork_per_item=False avoids relying on multiprocessing start-method-specific
+        # state inheritance, which varies between 'fork' and 'forkserver'.)
         handler_config = self.config['test1'].copy()
+        handler_config['HANDLERS'][0]['KWARGS'] = {'fork_per_item': False}
         client = self.m.client_from_config("test", handler_config)
         client.session = MockXQueueServer()
         client._handle_submission(json.dumps({
@@ -176,6 +179,6 @@ def test_main_with_errors(self):
         self.assertIn('required', err_msg)
         sys.stderr = stderr
 
-        mydir = Path(__file__).dirname()
-        args = ['-d', mydir / "fixtures/config"]
+        mydir = Path(__file__).parent
+        args = ['-d', str(mydir / "fixtures/config")]
         self.assertEqual(manager.main(args), 0)
diff --git a/tests/test_metrics.py b/tests/test_metrics.py
new file mode 100644
index 0000000..765d680
--- /dev/null
+++ b/tests/test_metrics.py
@@ -0,0 +1,90 @@
+import unittest
+from unittest.mock import patch, MagicMock
+
+from opentelemetry.sdk.metrics import MeterProvider
+from opentelemetry.sdk.metrics.export import InMemoryMetricReader
+
+from xqueue_watcher.metrics import (
+    _build_meter_provider,
+    _METER_NAME,
+    _DEFAULT_SERVICE_NAME,
+)
+
+
+class TestBuildMeterProvider(unittest.TestCase):
+    def test_returns_meter_provider(self):
+        with patch.dict("os.environ", {}, clear=False):
+            provider = _build_meter_provider()
+        self.assertIsInstance(provider, MeterProvider)
+
+    def test_no_otlp_endpoint_means_no_readers(self):
+        env = {"OTEL_EXPORTER_OTLP_ENDPOINT": ""}
+        with patch.dict("os.environ", env):
+            provider = _build_meter_provider()
+        # No PeriodicExportingMetricReader attached → internal reader list is empty.
+        self.assertEqual(provider._sdk_config.metric_readers, [])
+
+    def test_otlp_endpoint_adds_reader(self):
+        env = {"OTEL_EXPORTER_OTLP_ENDPOINT": "http://otel-collector:4318"}
+        mock_exporter = MagicMock()
+        mock_reader = MagicMock()
+        with patch.dict("os.environ", env), \
+             patch("opentelemetry.exporter.otlp.proto.http.metric_exporter.OTLPMetricExporter",
+                   return_value=mock_exporter) as MockExporter, \
+             patch("xqueue_watcher.metrics.PeriodicExportingMetricReader",
+                   return_value=mock_reader) as MockReader:
+            provider = _build_meter_provider()
+            MockExporter.assert_called_once()
+            MockReader.assert_called_once_with(mock_exporter)
+        self.assertIn(mock_reader, provider._sdk_config.metric_readers)
+
+    def test_default_service_name_applied(self):
+        # Empty OTEL_SERVICE_NAME should still fall back to the built-in default.
+        with patch.dict("os.environ", {"OTEL_SERVICE_NAME": ""}):
+            provider = _build_meter_provider()
+        attrs = provider._sdk_config.resource.attributes
+        self.assertEqual(attrs.get("service.name"), _DEFAULT_SERVICE_NAME)
+
+    def test_custom_service_name_applied(self):
+        env = {"OTEL_SERVICE_NAME": "my-grader"}
+        with patch.dict("os.environ", env):
+            provider = _build_meter_provider()
+        attrs = provider._sdk_config.resource.attributes
+        self.assertEqual(attrs.get("service.name"), "my-grader")
+
+
+class TestInstruments(unittest.TestCase):
+    """Verify instruments record correctly against an in-memory provider."""
+
+    def setUp(self):
+        self.reader = InMemoryMetricReader()
+        self.provider = MeterProvider(metric_readers=[self.reader])
+        self.meter = self.provider.get_meter(_METER_NAME)
+
+    def _metric_names(self):
+        return {m.name for m in self.reader.get_metrics_data().resource_metrics[0].scope_metrics[0].metrics}
+
+    def test_process_item_counter(self):
+        counter = self.meter.create_counter("xqueuewatcher.process_item")
+        counter.add(1)
+        counter.add(2)
+        names = self._metric_names()
+        self.assertIn("xqueuewatcher.process_item", names)
+
+    def test_grader_payload_error_counter(self):
+        counter = self.meter.create_counter("xqueuewatcher.grader_payload_error")
+        counter.add(1)
+        names = self._metric_names()
+        self.assertIn("xqueuewatcher.grader_payload_error", names)
+
+    def test_grading_time_histogram(self):
+        hist = self.meter.create_histogram("xqueuewatcher.grading_time", unit="s")
+        hist.record(0.42)
+        names = self._metric_names()
+        self.assertIn("xqueuewatcher.grading_time", names)
+
+    def test_replies_counter(self):
+        counter = self.meter.create_counter("xqueuewatcher.replies")
+        counter.add(1)
+        names = self._metric_names()
+        self.assertIn("xqueuewatcher.replies", names)
diff --git a/uv.lock b/uv.lock
new file mode 100644
index 0000000..747fd5b
--- /dev/null
+++ b/uv.lock
@@ -0,0 +1,726 @@
+version = 1
+revision = 3
+requires-python = ">=3.11"
+
+[[package]]
+name = "certifi"
+version = "2026.2.25"
+source = { registry = "https://pypi.org/simple" }
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+]
+
+[[package]]
+name = "charset-normalizer"
+version = "3.4.5"
+source = { registry = "https://pypi.org/simple" }
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diff --git a/xqueue_watcher/containergrader.py b/xqueue_watcher/containergrader.py
new file mode 100644
index 0000000..9f938de
--- /dev/null
+++ b/xqueue_watcher/containergrader.py
@@ -0,0 +1,575 @@
+"""
+A grader implementation that executes student code inside an isolated container.
+
+Supports two backends:
+  - "kubernetes": creates a batch/v1 Job per submission (production)
+  - "docker": runs a local Docker container (local dev / CI)
+
+This is the recommended replacement for JailedGrader on Kubernetes deployments.
+No AppArmor or elevated host privileges are required.
+"""
+
+import json
+import logging
+import random
+import threading
+import time
+import uuid
+from pathlib import Path
+
+from .grader import Grader
+from .env_settings import get_container_grader_defaults
+
+
+_BACKEND_KUBERNETES = "kubernetes"
+_BACKEND_DOCKER = "docker"
+_SUPPORTED_BACKENDS = (_BACKEND_KUBERNETES, _BACKEND_DOCKER)
+
+log = logging.getLogger(__name__)
+
+
+class ImageDigestPoller:
+    """
+    Background thread that periodically resolves an image tag to its digest.
+
+    Resolves ``repo:tag`` → ``repo@sha256:…`` by querying the Docker registry
+    via the Docker SDK's ``inspect_distribution`` API (no image pull required).
+    The resolved reference is cached and refreshed every ``poll_interval`` seconds.
+
+    Thread-safe: ``resolved_image`` may be read from any thread at any time.
+
+    If the initial resolution fails, ``resolved_image`` returns the original
+    unresolved reference so that grading can proceed with ``imagePullPolicy:
+    Always`` as a safe fallback.
+    """
+
+    def __init__(self, image: str, poll_interval: int = 300) -> None:
+        self._image = image
+        self._poll_interval = poll_interval
+        self._resolved: str | None = None
+        self._lock = threading.Lock()
+        self._thread = threading.Thread(
+            target=self._poll_loop, name=f"digest-poller-{image}", daemon=True
+        )
+        self._thread.start()
+
+    @property
+    def resolved_image(self) -> str:
+        with self._lock:
+            return self._resolved if self._resolved is not None else self._image
+
+    def _poll_loop(self) -> None:
+        while True:
+            self._refresh()
+            time.sleep(self._poll_interval)
+
+    def _refresh(self) -> None:
+        try:
+            import docker as docker_sdk
+
+            client = docker_sdk.APIClient()
+            info = client.inspect_distribution(self._image)
+            digest = info["Descriptor"]["digest"]
+            repo = self._image.split(":")[0].split("@")[0]
+            resolved = f"{repo}@{digest}"
+            with self._lock:
+                if self._resolved != resolved:
+                    log.info(
+                        "Resolved grader image %s → %s", self._image, resolved
+                    )
+                    self._resolved = resolved
+        except Exception:
+            log.warning(
+                "Failed to resolve digest for grader image %s; "
+                "will retry in %ds",
+                self._image,
+                self._poll_interval,
+                exc_info=True,
+            )
+
+
+class ContainerGrader(Grader):
+    """
+    Grades student submissions by running them inside an isolated container.
+
+    The grader scripts and staff answer are baked into the course-specific grader
+    image.  The container runs the complete grading pipeline (preprocessing, running
+    both the staff answer and the student submission, comparing results) and returns
+    a JSON grade result.  The watcher pod does not need local access to grader files.
+
+    Configuration (passed as KWARGS in the conf.d JSON handler config):
+
+      grader_root        - Path to the grader directory inside the container image.
+                           For the Docker backend this is bind-mounted from the host;
+                           for Kubernetes the scripts are baked into the image.
+      image              - Docker image to run. Should extend grader-base and include
+                           all course-specific grader scripts and dependencies.
+      backend            - "kubernetes" or "docker". Defaults to
+                           XQWATCHER_GRADER_BACKEND env var, or "kubernetes".
+      namespace          - Kubernetes namespace to create Jobs in. Defaults to
+                           XQWATCHER_GRADER_NAMESPACE env var, or "default".
+      cpu_limit          - CPU limit for the grading container. Defaults to
+                           XQWATCHER_GRADER_CPU_LIMIT env var, or "500m".
+      memory_limit       - Memory limit for the grading container. Defaults to
+                           XQWATCHER_GRADER_MEMORY_LIMIT env var, or "256Mi".
+      timeout            - Maximum wall-clock seconds a grading job may run. Defaults
+                           to XQWATCHER_GRADER_TIMEOUT env var, or 20.
+      strip_path_components - Number of leading path components to strip from
+                           the grader path (relative to grader_root) before
+                           passing it to the container entrypoint.  Use this
+                           when the LMS grader_payload ``grader`` field still
+                           contains a legacy prefix from the old git-clone
+                           setup, e.g. ``{queue_name}/graders/{actual_path}``.
+                           Set to 2 to strip both the queue name and the
+                           redundant repo subdirectory.  Default: 0 (no
+                           stripping).
+      image_pull_policy  - Kubernetes imagePullPolicy for grading Jobs: "Always",
+                           "IfNotPresent", or "Never". When None (default) the policy
+                           is inferred from the image reference: "IfNotPresent" for
+                           digest-pinned refs (``repo@sha256:…``), "Always" for
+                           tag-based refs (no digest present).
+      poll_image_digest  - When True and ``image`` is a tag-based reference, start
+                           a background ``ImageDigestPoller`` that periodically
+                           resolves the tag to its current digest.  Grading Jobs will
+                           use the most recently resolved ``repo@digest`` reference,
+                           which ensures Kubernetes nodes always pull the latest
+                           pushed image without relying on ``imagePullPolicy: Always``
+                           for every pod. Default: False.
+      digest_poll_interval - Seconds between digest resolution polls when
+                           ``poll_image_digest`` is True. Default: 300.
+    """
+
+    def __init__(
+        self,
+        grader_root,
+        image,
+        backend=None,
+        namespace=None,
+        cpu_limit=None,
+        memory_limit=None,
+        timeout=None,
+        image_pull_policy=None,
+        poll_image_digest=False,
+        digest_poll_interval=300,
+        strip_path_components=0,
+        **kwargs,
+    ):
+        env_defaults = get_container_grader_defaults()
+        resolved_backend = backend if backend is not None else env_defaults["backend"]
+        if resolved_backend not in _SUPPORTED_BACKENDS:
+            raise ValueError(
+                f"Unsupported backend {resolved_backend!r}. Choose from {_SUPPORTED_BACKENDS}."
+            )
+        super().__init__(grader_root=grader_root, fork_per_item=False, **kwargs)
+        self.image = image
+        self.backend = resolved_backend
+        self.namespace = namespace if namespace is not None else env_defaults["namespace"]
+        self.cpu_limit = cpu_limit if cpu_limit is not None else env_defaults["cpu_limit"]
+        self.memory_limit = memory_limit if memory_limit is not None else env_defaults["memory_limit"]
+        self.timeout = timeout if timeout is not None else env_defaults["timeout"]
+        self.strip_path_components = int(strip_path_components)
+
+        # image_pull_policy: explicit override or auto-detect from image ref.
+        # Normalise to title-case ("Always", "IfNotPresent", "Never") regardless
+        # of how the value was supplied in KWARGS — the Kubernetes API is
+        # case-sensitive and rejects variants like "always" or "ALWAYS".
+        _policy_map = {p.lower(): p for p in ("Always", "IfNotPresent", "Never")}
+        if image_pull_policy is not None:
+            self.image_pull_policy = _policy_map.get(
+                image_pull_policy.strip().lower(), image_pull_policy.strip()
+            )
+        elif "@sha256:" in image:
+            self.image_pull_policy = "IfNotPresent"
+        else:
+            self.image_pull_policy = "Always"
+
+        # Optional background digest polling for tag-based image references.
+        self._digest_poller: ImageDigestPoller | None = None
+        if poll_image_digest and "@sha256:" not in image:
+            self._digest_poller = ImageDigestPoller(
+                image=image, poll_interval=digest_poll_interval
+            )
+            log.info(
+                "Started digest poller for grader image %s (interval=%ds)",
+                image,
+                digest_poll_interval,
+            )
+
+    def _effective_image(self) -> str:
+        """Return the image reference to use for container execution.
+
+        If a digest poller is active and has resolved a digest, returns the
+        pinned ``repo@sha256:…`` form.  Falls back to the configured tag-based
+        reference otherwise.
+        """
+        if self._digest_poller is not None:
+            return self._digest_poller.resolved_image
+        return self.image
+
+    # ------------------------------------------------------------------
+    # Internal: container execution
+    # ------------------------------------------------------------------
+
+    def _run(self, grader_path, code, seed, grader_config=None):
+        """
+        Run the complete grading pipeline inside a container.
+
+        The container entrypoint (grader_support.entrypoint) handles:
+          - Loading the grader module (baked into the image)
+          - Preprocessing both staff answer and student submission
+          - Running both through grader_support.run
+          - Comparing results and returning the final grade JSON
+
+        Returns the raw stdout bytes (JSON grade result).
+        Raises RuntimeError on timeout or non-zero exit.
+        """
+        # Warn on large submissions: K8s env vars contribute to the Pod object
+        # stored in etcd (limit ~1.5 MB total); very large submissions may cause
+        # job creation to fail.  Submissions > 32 KB are unusual for course work.
+        code_bytes = len(code.encode("utf-8"))
+        if code_bytes > 32 * 1024:
+            self.log.warning(
+                "Submission code is large (%d bytes). Very large submissions may "
+                "exceed Kubernetes API object size limits when passed via env var.",
+                code_bytes,
+            )
+        if grader_config is None:
+            grader_config = {}
+        if self.backend == _BACKEND_KUBERNETES:
+            return self._run_kubernetes(grader_path, code, seed, grader_config)
+        return self._run_docker(grader_path, code, seed, grader_config)
+
+    def _run_kubernetes(self, grader_path, code, seed, grader_config):
+        """Create a Kubernetes Job, wait for it, collect stdout, delete it."""
+        try:
+            from kubernetes import client as k8s_client, config as k8s_config
+        except ImportError:
+            raise RuntimeError(
+                "The 'kubernetes' package is required for the kubernetes backend. "
+                "Install it with: uv add kubernetes"
+            )
+
+        try:
+            k8s_config.load_incluster_config()
+        except k8s_config.ConfigException:
+            k8s_config.load_kube_config()
+
+        job_name = f"xqueue-grader-{uuid.uuid4().hex[:12]}"
+        batch_v1 = k8s_client.BatchV1Api()
+        core_v1 = k8s_client.CoreV1Api()
+
+        job_manifest = self._build_k8s_job(job_name, grader_path, code, seed, grader_config)
+
+        try:
+            batch_v1.create_namespaced_job(namespace=self.namespace, body=job_manifest)
+            self.log.debug("Created Job %s", job_name)
+
+            stdout = self._wait_and_collect_k8s(
+                batch_v1, core_v1, job_name, timeout=self.timeout
+            )
+            return stdout
+        finally:
+            try:
+                batch_v1.delete_namespaced_job(
+                    name=job_name,
+                    namespace=self.namespace,
+                    body=k8s_client.V1DeleteOptions(propagation_policy="Foreground"),
+                )
+            except Exception:
+                self.log.warning("Failed to delete Job %s", job_name, exc_info=True)
+
+    def _build_k8s_job(self, job_name, grader_path, code, seed, grader_config=None):
+        """Return a kubernetes Job manifest for the given grading run."""
+        from kubernetes import client as k8s_client
+
+        if grader_config is None:
+            grader_config = {}
+
+        # The entrypoint takes: GRADER_FILE SEED
+        # The grader scripts are baked into the course-specific image at grader_path.
+        # working_dir must stay at /grader (the WORKDIR of the base image) so that
+        # `python -m grader_support.entrypoint` can locate the grader_support package.
+        #
+        # Legacy LMS configs may include a queue-name prefix in the grader path
+        # (e.g. "{queue_name}/graders/{actual_path}") left over from the old
+        # git-clone deployment.  strip_path_components removes N leading components
+        # from the path relative to grader_root before constructing the container arg.
+        if self.strip_path_components > 0:
+            from pathlib import Path as _Path
+            rel = _Path(grader_path).relative_to(self.grader_root)
+            stripped = _Path(*rel.parts[self.strip_path_components:])
+            grader_abs = str(self.grader_root / stripped)
+        else:
+            grader_abs = str(grader_path)
+
+        return k8s_client.V1Job(
+            api_version="batch/v1",
+            kind="Job",
+            metadata=k8s_client.V1ObjectMeta(
+                name=job_name,
+                labels={
+                    "app.kubernetes.io/component": "xqueue-grader",
+                    "app.kubernetes.io/managed-by": "xqueue-watcher",
+                },
+            ),
+            spec=k8s_client.V1JobSpec(
+                backoff_limit=0,
+                active_deadline_seconds=self.timeout,
+                ttl_seconds_after_finished=300,
+                template=k8s_client.V1PodTemplateSpec(
+                    metadata=k8s_client.V1ObjectMeta(
+                        labels={
+                            "app.kubernetes.io/component": "xqueue-grader",
+                            "app.kubernetes.io/managed-by": "xqueue-watcher",
+                        }
+                    ),
+                    spec=k8s_client.V1PodSpec(
+                        restart_policy="Never",
+                        automount_service_account_token=False,
+                        security_context=k8s_client.V1PodSecurityContext(
+                            run_as_non_root=True,
+                            run_as_user=1000,
+                        ),
+                        # Grader scripts are baked into the course-specific image
+                        # (no volume mount required).  The image extends
+                        # grader_support/Dockerfile.base and includes the grader
+                        # files at the path referenced by grader_abs.
+                        containers=[
+                            k8s_client.V1Container(
+                                name="grader",
+                                image=self._effective_image(),
+                                image_pull_policy=self.image_pull_policy,
+                                # entrypoint signature: GRADER_FILE SEED
+                                args=[grader_abs, str(seed)],
+                                working_dir="/grader",
+                                env=[
+                                    k8s_client.V1EnvVar(
+                                        name="SUBMISSION_CODE",
+                                        value=code,
+                                    ),
+                                    k8s_client.V1EnvVar(
+                                        name="GRADER_LANGUAGE",
+                                        value=grader_config.get("lang", "en"),
+                                    ),
+                                    k8s_client.V1EnvVar(
+                                        name="HIDE_OUTPUT",
+                                        value="1" if grader_config.get("hide_output") else "0",
+                                    ),
+                                ],
+                                resources=k8s_client.V1ResourceRequirements(
+                                    limits={
+                                        "cpu": self.cpu_limit,
+                                        "memory": self.memory_limit,
+                                    },
+                                    requests={
+                                        "cpu": "100m",
+                                        "memory": "64Mi",
+                                    },
+                                ),
+                                security_context=k8s_client.V1SecurityContext(
+                                    allow_privilege_escalation=False,
+                                    read_only_root_filesystem=True,
+                                    capabilities=k8s_client.V1Capabilities(drop=["ALL"]),
+                                ),
+                                volume_mounts=[
+                                    k8s_client.V1VolumeMount(
+                                        name="tmp",
+                                        mount_path="/tmp",
+                                    ),
+                                ],
+                            )
+                        ],
+                        volumes=[
+                            # emptyDir at /tmp is required because read_only_root_filesystem=True
+                            # prevents writes to the root FS; the entrypoint writes the student
+                            # submission to /tmp/submission.py before executing it.
+                            k8s_client.V1Volume(
+                                name="tmp",
+                                empty_dir=k8s_client.V1EmptyDirVolumeSource(),
+                            ),
+                        ],
+                    )
+                ),
+            ),
+        )
+
+    def _wait_and_collect_k8s(self, batch_v1, core_v1, job_name, timeout):
+        """Poll until the Job completes, then return its pod's stdout bytes."""
+        deadline = time.monotonic() + timeout
+        while time.monotonic() < deadline:
+            job = batch_v1.read_namespaced_job(name=job_name, namespace=self.namespace)
+            if job.status.succeeded:
+                break
+            if job.status.failed:
+                raise RuntimeError(f"Grading Job {job_name} failed.")
+            time.sleep(1)
+        else:
+            raise RuntimeError(
+                f"Grading Job {job_name} exceeded timeout of {timeout}s."
+            )
+
+        pods = core_v1.list_namespaced_pod(
+            namespace=self.namespace,
+            label_selector=f"job-name={job_name}",
+        )
+        if not pods.items:
+            raise RuntimeError(f"No pods found for Job {job_name}.")
+
+        pod_name = pods.items[0].metadata.name
+        log = core_v1.read_namespaced_pod_log(name=pod_name, namespace=self.namespace)
+        return log.encode("utf-8")
+
+    def _run_docker(self, grader_path, code, seed, grader_config=None):
+        """Run a local Docker container and return stdout bytes."""
+        try:
+            import docker as docker_sdk
+        except ImportError:
+            raise RuntimeError(
+                "The 'docker' package is required for the docker backend. "
+                "Install it with: uv add docker"
+            )
+
+        if grader_config is None:
+            grader_config = {}
+
+        grader_dir = str(Path(grader_path).parent.resolve())
+        grader_rel = str(Path(grader_path).name)
+        # Mount the problem directory at /graders/ (not /grader/ which would
+        # overwrite the base image's grader_support package).  Pass the grader
+        # as an absolute in-container path.
+        container_grader_path = f"/graders/{grader_rel}"
+
+        env = {
+            "SUBMISSION_CODE": code,
+            "GRADER_LANGUAGE": grader_config.get("lang", "en"),
+            "HIDE_OUTPUT": "1" if grader_config.get("hide_output") else "0",
+        }
+
+        client = docker_sdk.from_env()
+        try:
+            # Run detached so we can enforce a wall-clock timeout via container.wait().
+            # containers.run() does not accept a timeout argument; using detach=True
+            # lets us call container.wait(timeout=...) to cap execution time.
+            container = client.containers.run(
+                image=self._effective_image(),
+                # entrypoint signature: GRADER_FILE SEED
+                command=[container_grader_path, str(seed)],
+                working_dir="/grader",
+                environment=env,
+                volumes={grader_dir: {"bind": "/graders", "mode": "ro"}},
+                mem_limit=_parse_memory_bytes(self.memory_limit),
+                nano_cpus=int(_parse_cpu_millis(self.cpu_limit) * 1_000_000),
+                network_disabled=True,
+                read_only=True,
+                detach=True,
+                stdout=True,
+                stderr=False,
+            )
+            try:
+                exit_info = container.wait(timeout=self.timeout)
+                if exit_info.get("StatusCode", 0) != 0:
+                    stderr = container.logs(stdout=False, stderr=True)
+                    raise RuntimeError(
+                        f"Grading container exited with non-zero status: {exit_info}. "
+                        f"stderr: {stderr[:2000] if stderr else ''}"
+                    )
+                result = container.logs(stdout=True, stderr=False)
+            except Exception as exc:
+                # Catch ReadTimeout (requests.exceptions.ReadTimeout) from container.wait()
+                # and any other unexpected error, converting to a clear RuntimeError.
+                exc_name = type(exc).__name__
+                if "Timeout" in exc_name or "timeout" in str(exc).lower():
+                    raise RuntimeError(
+                        f"Grading container timed out after {self.timeout}s."
+                    ) from exc
+                raise
+            finally:
+                container.remove(force=True)
+        except docker_sdk.errors.ContainerError as exc:
+            raise RuntimeError(
+                f"Grading container exited with error: {exc}"
+            ) from exc
+
+        return result if isinstance(result, bytes) else result.encode("utf-8")
+
+    # ------------------------------------------------------------------
+    # Public grading interface
+    # ------------------------------------------------------------------
+
+    def grade(self, grader_path, grader_config, submission):
+        """
+        Grade a student submission by running the full pipeline inside a container.
+
+        The container (grader_support.entrypoint) handles all grading steps:
+          - Loading the grader module (baked into the image)
+          - Validating the submission format
+          - Preprocessing and running the staff answer and student submission
+          - Comparing results test-by-test
+          - Returning the final grade as JSON
+
+        Returns a dict with keys: correct, score, errors, tests.
+        """
+        if not isinstance(submission, str):
+            self.log.warning("Submission is NOT unicode")
+
+        results = {
+            "errors": [],
+            "tests": [],
+            "correct": False,
+            "score": 0,
+        }
+
+        if grader_config.get("skip_grader", False):
+            results["correct"] = True
+            results["score"] = 1
+            self.log.debug("Skipping the grader.")
+            return results
+
+        seed = str(random.randint(0, 20000))
+
+        try:
+            output = self._run(grader_path, submission, seed, grader_config)
+            grade_result = json.loads(output.decode("utf-8"))
+            return grade_result
+        except Exception:
+            self.log.exception(
+                "Grading container failed. grader = %s", grader_path
+            )
+            results["errors"].append(
+                "There was a problem running your code (Staff debug). "
+                "Please contact the course staff for assistance."
+            )
+            return results
+
+
+
+def _parse_cpu_millis(cpu_str):
+    """Convert a Kubernetes CPU string like '500m' or '1' to a float of millicores."""
+    cpu_str = str(cpu_str).strip()
+    if cpu_str.endswith("m"):
+        return float(cpu_str[:-1])
+    return float(cpu_str) * 1000
+
+
+def _parse_memory_bytes(memory_str):
+    """Convert a Kubernetes/Docker memory string to bytes for the Docker API.
+
+    Handles IEC binary suffixes (Ki, Mi, Gi, Ti) and SI decimal suffixes
+    (K, M, G, T).  Plain integers are returned unchanged.
+
+    Examples:
+        "256Mi" -> 268435456
+        "1Gi"   -> 1073741824
+        "512M"  -> 512000000
+        "1024"  -> 1024
+    """
+    s = str(memory_str).strip()
+    iec = {"Ti": 1024**4, "Gi": 1024**3, "Mi": 1024**2, "Ki": 1024}
+    si  = {"T": 1000**4,  "G": 1000**3,  "M": 1000**2,  "K": 1000}
+    for suffix, factor in iec.items():
+        if s.endswith(suffix):
+            return int(float(s[: -len(suffix)]) * factor)
+    for suffix, factor in si.items():
+        if s.endswith(suffix):
+            return int(float(s[: -len(suffix)]) * factor)
+    return int(s)
diff --git a/xqueue_watcher/env_settings.py b/xqueue_watcher/env_settings.py
new file mode 100644
index 0000000..38cb312
--- /dev/null
+++ b/xqueue_watcher/env_settings.py
@@ -0,0 +1,192 @@
+"""
+12-factor / Kubernetes-compatible settings for xqueue-watcher.
+
+All manager configuration values can be supplied via environment variables
+using the ``XQWATCHER_`` prefix.  This module mirrors the keys defined in
+:data:`xqueue_watcher.settings.MANAGER_CONFIG_DEFAULTS` so it can be used
+as a drop-in source of configuration alongside or instead of the JSON file
+read by :func:`xqueue_watcher.settings.get_manager_config_values`.
+
+It also provides :func:`configure_logging`, which initialises a structured
+stdout logging configuration without requiring a ``logging.json`` file —
+suitable for Kubernetes and any 12-factor environment where logs are consumed
+from stdout by the container runtime.
+
+Environment variables
+---------------------
+XQWATCHER_LOG_LEVEL
+    Root log level (default: ``INFO``).  Accepts any standard Python level
+    name: ``DEBUG``, ``INFO``, ``WARNING``, ``ERROR``, ``CRITICAL``.
+XQWATCHER_HTTP_BASIC_AUTH
+    HTTP Basic Auth credentials as ``username:password``.  Unset or empty
+    means no authentication (equivalent to ``None``).
+XQWATCHER_POLL_TIME
+    Seconds between liveness checks of client threads (integer, default 10).
+XQWATCHER_REQUESTS_TIMEOUT
+    Timeout in seconds for outbound HTTP requests (integer, default 1).
+XQWATCHER_POLL_INTERVAL
+    Seconds between queue-polling attempts (integer, default 1).
+XQWATCHER_LOGIN_POLL_INTERVAL
+    Seconds between login-retry attempts (integer, default 5).
+XQWATCHER_FOLLOW_CLIENT_REDIRECTS
+    Follow HTTP redirects when ``true`` or ``1``, ignore otherwise
+    (boolean, default false).
+
+ContainerGrader defaults
+~~~~~~~~~~~~~~~~~~~~~~~~
+These allow operators to set deployment-wide grader defaults without repeating
+them in every conf.d queue JSON file.  Individual queue configs may still
+override any of these values in their ``KWARGS`` block.
+
+XQWATCHER_GRADER_BACKEND
+    Container backend: ``kubernetes`` (default) or ``docker``.
+XQWATCHER_GRADER_NAMESPACE
+    Kubernetes namespace in which grading Jobs are created (default:
+    ``default``).  Ignored by the Docker backend.
+XQWATCHER_GRADER_CPU_LIMIT
+    CPU limit for grading containers in Kubernetes / Docker notation
+    (default: ``500m``).
+XQWATCHER_GRADER_MEMORY_LIMIT
+    Memory limit for grading containers, e.g. ``256Mi`` (default: ``256Mi``).
+XQWATCHER_GRADER_TIMEOUT
+    Maximum wall-clock seconds a grading job may run (integer, default 20).
+"""
+
+import logging
+import logging.config
+import os
+
+from .settings import MANAGER_CONFIG_DEFAULTS
+
+_PREFIX = "XQWATCHER_"
+
+_LOG_FORMAT = "%(asctime)s %(levelname)s %(process)d [%(name)s] %(filename)s:%(lineno)d - %(message)s"
+
+
+# ---------------------------------------------------------------------------
+# Internal helpers
+# ---------------------------------------------------------------------------
+
+def _get_bool(name: str, default: bool) -> bool:
+    raw = os.environ.get(name, "").strip().lower()
+    if raw in ("1", "true", "yes"):
+        return True
+    if raw in ("0", "false", "no"):
+        return False
+    return default
+
+
+def _get_int(name: str, default: int) -> int:
+    raw = os.environ.get(name, "").strip()
+    if raw:
+        return int(raw)
+    return default
+
+
+def _get_str(name: str, default: str) -> str:
+    raw = os.environ.get(name, "").strip()
+    return raw if raw else default
+
+
+def _get_auth(name: str, default):
+    raw = os.environ.get(name, "").strip()
+    return raw if raw else default
+
+
+# ---------------------------------------------------------------------------
+# Public API
+# ---------------------------------------------------------------------------
+
+def configure_logging() -> None:
+    """
+    Initialise logging to stdout using a level read from the environment.
+
+    This is the 12-factor / Kubernetes alternative to supplying a
+    ``logging.json`` file.  All log records are written to ``stdout`` so they
+    are captured by the container runtime and forwarded to whatever log
+    aggregation system is in use (e.g. Fluentd, Loki, CloudWatch).
+
+    The root log level defaults to ``INFO`` and can be overridden via the
+    ``XQWATCHER_LOG_LEVEL`` environment variable.  The ``requests`` and
+    ``urllib3`` libraries are pinned to ``WARNING`` to suppress noisy
+    HTTP-level debug output.
+    """
+    level = os.environ.get(f"{_PREFIX}LOG_LEVEL", "INFO").strip().upper()
+
+    logging.config.dictConfig({
+        "version": 1,
+        "disable_existing_loggers": False,
+        "formatters": {
+            "standard": {
+                "format": _LOG_FORMAT,
+            },
+        },
+        "handlers": {
+            "stdout": {
+                "class": "logging.StreamHandler",
+                "stream": "ext://sys.stdout",
+                "formatter": "standard",
+                "level": level,
+            },
+        },
+        "root": {
+            "handlers": ["stdout"],
+            "level": level,
+        },
+        "loggers": {
+            "requests": {"level": "WARNING"},
+            "urllib3": {"level": "WARNING"},
+        },
+    })
+
+
+def get_manager_config_from_env() -> dict:
+    """
+    Return manager configuration populated from environment variables.
+
+    Values not present in the environment fall back to
+    :data:`~xqueue_watcher.settings.MANAGER_CONFIG_DEFAULTS`.
+    """
+    return {
+        "HTTP_BASIC_AUTH": _get_auth(
+            f"{_PREFIX}HTTP_BASIC_AUTH",
+            MANAGER_CONFIG_DEFAULTS["HTTP_BASIC_AUTH"],
+        ),
+        "POLL_TIME": _get_int(
+            f"{_PREFIX}POLL_TIME",
+            MANAGER_CONFIG_DEFAULTS["POLL_TIME"],
+        ),
+        "REQUESTS_TIMEOUT": _get_int(
+            f"{_PREFIX}REQUESTS_TIMEOUT",
+            MANAGER_CONFIG_DEFAULTS["REQUESTS_TIMEOUT"],
+        ),
+        "POLL_INTERVAL": _get_int(
+            f"{_PREFIX}POLL_INTERVAL",
+            MANAGER_CONFIG_DEFAULTS["POLL_INTERVAL"],
+        ),
+        "LOGIN_POLL_INTERVAL": _get_int(
+            f"{_PREFIX}LOGIN_POLL_INTERVAL",
+            MANAGER_CONFIG_DEFAULTS["LOGIN_POLL_INTERVAL"],
+        ),
+        "FOLLOW_CLIENT_REDIRECTS": _get_bool(
+            f"{_PREFIX}FOLLOW_CLIENT_REDIRECTS",
+            MANAGER_CONFIG_DEFAULTS["FOLLOW_CLIENT_REDIRECTS"],
+        ),
+    }
+
+
+def get_container_grader_defaults() -> dict:
+    """
+    Return deployment-wide ContainerGrader defaults from environment variables.
+
+    These values are used when a ``ContainerGrader`` is constructed without
+    an explicit value for the corresponding parameter.  Any value supplied
+    directly in the conf.d ``KWARGS`` block takes precedence.
+    """
+    return {
+        "backend": _get_str(f"{_PREFIX}GRADER_BACKEND", "kubernetes"),
+        "namespace": _get_str(f"{_PREFIX}GRADER_NAMESPACE", "default"),
+        "cpu_limit": _get_str(f"{_PREFIX}GRADER_CPU_LIMIT", "500m"),
+        "memory_limit": _get_str(f"{_PREFIX}GRADER_MEMORY_LIMIT", "256Mi"),
+        "timeout": _get_int(f"{_PREFIX}GRADER_TIMEOUT", 20),
+    }
diff --git a/xqueue_watcher/grader.py b/xqueue_watcher/grader.py
index ed3744d..72e2e18 100644
--- a/xqueue_watcher/grader.py
+++ b/xqueue_watcher/grader.py
@@ -2,13 +2,13 @@
 Implementation of a grader compatible with XServer
 """
 import html
-import os
 import time
 import json
-from path import Path
+from pathlib import Path
 import logging
 import multiprocessing
-from statsd import statsd
+
+from . import metrics as _metrics
 
 
 def format_errors(errors):
@@ -110,7 +110,7 @@ def grade(self, grader_path, grader_config, student_response):
 
     def process_item(self, content, queue=None):
         try:
-            statsd.increment('xqueuewatcher.process-item')
+            _metrics.process_item_counter.add(1)
             body = content['xqueue_body']
             files = content['xqueue_files']
 
@@ -123,25 +123,35 @@ def process_item(self, content, queue=None):
             except ValueError as err:
                 # If parsing json fails, erroring is fine--something is wrong in the content.
                 # However, for debugging, still want to see what the problem is
-                statsd.increment('xqueuewatcher.grader_payload_error')
+                _metrics.grader_payload_error_counter.add(1)
 
                 self.log.debug(f"error parsing: '{payload}' -- {err}")
                 raise
 
             self.log.debug(f"Processing submission, grader payload: {payload}")
             relative_grader_path = grader_config['grader']
-            grader_path = os.path.abspath(self.grader_root / relative_grader_path)
+            grader_path = (self.grader_root / relative_grader_path).resolve()
+            # Guard against path traversal: ensure the resolved path stays within grader_root.
+            try:
+                grader_path.relative_to(self.grader_root.resolve())
+            except ValueError as exc:
+                raise ValueError(
+                    f"Grader path {relative_grader_path!r} resolves outside "
+                    f"grader_root {self.grader_root!r}"
+                ) from exc
             start = time.time()
             results = self.grade(grader_path, grader_config, student_response)
 
-            statsd.histogram('xqueuewatcher.grading-time', time.time() - start)
+            elapsed = time.time() - start
+            _metrics.grading_time_histogram.record(elapsed)
+            self.log.info('grading-time seconds=%.3f', elapsed)
 
             # Make valid JSON message
             reply = {'correct': results['correct'],
                      'score': results['score'],
                      'msg': self.render_results(results)}
 
-            statsd.increment('xqueuewatcher.replies (non-exception)')
+            _metrics.replies_counter.add(1)
         except Exception as e:
             self.log.exception("process_item")
             if queue:
diff --git a/xqueue_watcher/jailedgrader.py b/xqueue_watcher/jailedgrader.py
index 3692bab..dc3f130 100644
--- a/xqueue_watcher/jailedgrader.py
+++ b/xqueue_watcher/jailedgrader.py
@@ -1,17 +1,24 @@
 """
 An implementation of a grader that uses codejail to sandbox submission execution.
+
+NOTE: This grader requires codejail (an optional dependency) and an AppArmor-enabled
+host OS. For Kubernetes deployments, use ContainerGrader instead.
 """
 import codecs
 import os
 import sys
 import importlib
+import importlib.util
 import json
 import random
 import gettext
-from path import Path
-import six
+from pathlib import Path
 
-import codejail
+try:
+    import codejail
+    import codejail.jail_code
+except ImportError:
+    codejail = None
 
 from grader_support.gradelib import EndTest
 from grader_support.graderutil import LANGUAGE
@@ -21,21 +28,8 @@
 
 TIMEOUT = 1
 
-def path_to_six():
-    """
-    Return the full path to six.py
-    """
-    if any(six.__file__.endswith(suffix) for suffix in ('.pyc', '.pyo')):
-        # __file__ points to the compiled bytecode in python 2
-        return Path(six.__file__[:-1])
-    else:
-        # __file__ points to the .py file in python 3
-        return Path(six.__file__)
-
-
 SUPPORT_FILES = [
-    Path(grader_support.__file__).dirname(),
-    path_to_six(),
+    Path(grader_support.__file__).parent,
 ]
 
 
@@ -63,8 +57,16 @@ class JailedGrader(Grader):
     A grader implementation that uses codejail.
     Instantiate it with grader_root="path/to/graders"
     and optionally codejail_python="python name" (the name that you used to configure codejail)
+
+    NOTE: Requires codejail (optional dependency) and an AppArmor-enabled host.
+    For Kubernetes deployments, use ContainerGrader instead.
     """
     def __init__(self, *args, **kwargs):
+        if codejail is None:
+            raise RuntimeError(
+                "codejail is not installed. JailedGrader requires codejail and an "
+                "AppArmor-enabled host. For containerized deployments use ContainerGrader."
+            )
         self.codejail_python = kwargs.pop("codejail_python", "python")
         super().__init__(*args, **kwargs)
         self.locale_dir = self.grader_root / "conf" / "locale"
@@ -81,7 +83,7 @@ def _run(self, grader_path, thecode, seed):
         if self.locale_dir.exists():
             files.append(self.locale_dir)
         extra_files = [('submission.py', thecode.encode('utf-8'))]
-        argv = ["-B", "-m", "grader_support.run", Path(grader_path).basename(), 'submission.py', seed]
+        argv = ["-B", "-m", "grader_support.run", Path(grader_path).name, 'submission.py', seed]
         r = codejail.jail_code.jail_code(self.codejail_python, files=files, extra_files=extra_files, argv=argv)
         return r
 
@@ -115,15 +117,16 @@ def grade(self, grader_path, grader_config, submission):
 
         self._enable_i18n(grader_config.get("lang", LANGUAGE))
 
-        answer_path = Path(grader_path).dirname() / 'answer.py'
+        answer_path = Path(grader_path).parent / 'answer.py'
         with open(answer_path, 'rb') as f:
             answer = f.read().decode('utf-8')
 
         # Import the grader, straight from the original file.  (It probably isn't in
         # sys.path, and we may be in a long running gunicorn process, so we don't
         # want to add stuff to sys.path either.)
-        sf_loader = importlib.machinery.SourceFileLoader("grader_module", str(grader_path))
-        grader_module = sf_loader.load_module()
+        spec = importlib.util.spec_from_file_location("grader_module", str(grader_path))
+        grader_module = importlib.util.module_from_spec(spec)
+        spec.loader.exec_module(grader_module)
         grader = grader_module.grader
 
         # Preprocess for grader-specified errors
@@ -279,8 +282,8 @@ def main(args):     # pragma: no cover
         submission = f.read().decode('utf-8')
 
     grader_config = {"lang": "eo"}
-    grader_path = path(grader_path).abspath()
-    g = JailedGrader(grader_root=grader_path.dirname().parent.parent)
+    grader_path = Path(grader_path).resolve()
+    g = JailedGrader(grader_root=grader_path.parent.parent.parent)
     pprint(g.grade(grader_path, grader_config, submission))
 
 
diff --git a/xqueue_watcher/manager.py b/xqueue_watcher/manager.py
index d699e5c..9209a12 100644
--- a/xqueue_watcher/manager.py
+++ b/xqueue_watcher/manager.py
@@ -5,14 +5,19 @@
 import json
 import logging
 import logging.config
-from path import Path
+from pathlib import Path
 import signal
 import sys
 import time
 
-from codejail import jail_code
+try:
+    from codejail import jail_code as _codejail_jail_code
+except ImportError:
+    _codejail_jail_code = None
 
 from .settings import get_manager_config_values, MANAGER_CONFIG_DEFAULTS
+from .metrics import configure_metrics
+from .env_settings import configure_logging
 
 
 class Manager:
@@ -87,20 +92,22 @@ def configure_from_directory(self, directory):
             with open(log_config) as config:
                 logging.config.dictConfig(json.load(config))
         else:
-            logging.basicConfig(level="DEBUG")
+            configure_logging()
         self.log = logging.getLogger('xqueue_watcher.manager')
 
+        configure_metrics()
+
         app_config_path = directory / 'xqwatcher.json'
         self.manager_config = get_manager_config_values(app_config_path)
 
         confd = directory / 'conf.d'
-        for watcher in confd.files('*.json'):
+        for watcher in sorted(confd.glob('*.json')):
             with open(watcher) as queue_config:
                 self.configure(json.load(queue_config))
 
     def enable_codejail(self, codejail_config):
         """
-        Enable codejail for the process.
+        Enable codejail for the process (legacy AppArmor-based sandbox).
         codejail_config is a dict like this:
         {
             "name": "python",
@@ -114,13 +121,18 @@ def enable_codejail(self, codejail_config):
         limits are optional
         user defaults to the current user
         """
+        if _codejail_jail_code is None:
+            raise RuntimeError(
+                "codejail is not installed. Cannot configure AppArmor-based sandboxing. "
+                "Use ContainerGrader for containerized deployments."
+            )
         name = codejail_config["name"]
         bin_path = codejail_config['bin_path']
         user = codejail_config.get('user', getpass.getuser())
-        jail_code.configure(name, bin_path, user=user)
+        _codejail_jail_code.configure(name, bin_path, user=user)
         limits = codejail_config.get("limits", {})
         for limit_name, value in limits.items():
-            jail_code.set_limit(limit_name, value)
+            _codejail_jail_code.set_limit(limit_name, value)
         self.log.info("configured codejail -> %s %s %s", name, bin_path, user)
         return name
 
diff --git a/xqueue_watcher/metrics.py b/xqueue_watcher/metrics.py
new file mode 100644
index 0000000..16ffb27
--- /dev/null
+++ b/xqueue_watcher/metrics.py
@@ -0,0 +1,76 @@
+"""
+OpenTelemetry metrics for xqueue-watcher.
+
+Call :func:`configure_metrics` once at process startup (before the first
+submission is processed).  All configuration is read from the standard
+OpenTelemetry environment variables so no application-level config files are
+needed:
+
+``OTEL_EXPORTER_OTLP_ENDPOINT``
+    OTLP collector endpoint, e.g. ``http://otel-collector:4318``.
+    When absent or empty, metrics are recorded in-process but not exported.
+``OTEL_SERVICE_NAME``
+    Service name attached to every metric (default: ``xqueue-watcher``).
+``OTEL_RESOURCE_ATTRIBUTES``
+    Additional resource attributes as ``key=value,...`` pairs.
+"""
+
+import os
+
+from opentelemetry import metrics
+from opentelemetry.sdk.metrics import MeterProvider
+from opentelemetry.sdk.metrics.export import PeriodicExportingMetricReader
+from opentelemetry.sdk.resources import Resource
+
+_METER_NAME = "xqueue_watcher"
+_DEFAULT_SERVICE_NAME = "xqueue-watcher"
+
+
+def _build_meter_provider() -> MeterProvider:
+    resource = Resource.create(
+        {"service.name": os.environ.get("OTEL_SERVICE_NAME", "").strip() or _DEFAULT_SERVICE_NAME}
+    )
+    readers = []
+    if os.environ.get("OTEL_EXPORTER_OTLP_ENDPOINT", "").strip():
+        from opentelemetry.exporter.otlp.proto.http.metric_exporter import OTLPMetricExporter
+        readers.append(PeriodicExportingMetricReader(OTLPMetricExporter()))
+    return MeterProvider(resource=resource, metric_readers=readers)
+
+
+def configure_metrics() -> None:
+    """Configure the global OTel MeterProvider from environment variables."""
+    metrics.set_meter_provider(_build_meter_provider())
+
+
+# ---------------------------------------------------------------------------
+# Instruments
+#
+# Created at module level against the global proxy meter.  The OTel proxy
+# delegates transparently to whichever MeterProvider is active, so these
+# instruments work correctly whether configure_metrics() has been called or
+# not (unmeasured data simply goes to the no-op provider until the real
+# provider is installed).
+# ---------------------------------------------------------------------------
+
+_meter = metrics.get_meter(_METER_NAME)
+
+process_item_counter = _meter.create_counter(
+    "xqueuewatcher.process_item",
+    description="Number of grading submissions received.",
+)
+
+grader_payload_error_counter = _meter.create_counter(
+    "xqueuewatcher.grader_payload_error",
+    description="Number of submissions whose grader_payload could not be parsed.",
+)
+
+grading_time_histogram = _meter.create_histogram(
+    "xqueuewatcher.grading_time",
+    unit="s",
+    description="Wall-clock time in seconds spent grading a single submission.",
+)
+
+replies_counter = _meter.create_counter(
+    "xqueuewatcher.replies",
+    description="Number of successful (non-exception) grading replies sent.",
+)