Does NASA Want a Space Economy?

L ast week, NASA held a press conference to announce “development plans” for Boeing’s “commercial Starliner” spacecraft. This included $359 million in new funding to Boeing for two new crew flights (in addition to the four Boeing has received funds for already but not yet flown) and direct aid (unspecified) from NASA to certify Starliner on United Launch Alliance’s Vulcan rocket once they run out of Atlas Vs.

This announcement is notable because just seven months ago, NASA issued a report acknowledging that a “Type A” mishap had occurred on the last Starliner mission launched in June 2024. This mission stranded astronauts Butch Wilmore and Suni Williams on the International Space Station (ISS) until a SpaceX vehicle could retrieve them.

A line can be drawn directly from the conclusions in the NASA report from February and the decision NASA made last week to double down on Starliner. In the report, a total of three organizational root causes were highlighted. Two of them were focused on NASA and conclude that what happened was due to “NASA’s hands-off contract approach” that “limited insight into the Starliner’s development” and “NASA CCP [Commercial Crew Program]’s culture [that] prioritized provider success over technical rigor.” Only one root cause was associated with Boeing’s performance: “Boeing’s inadequate systems engineering and reliance on subcontractors without sufficient oversight created gaps in hardware qualification.”

A good portion of the report focuses on the performance deficiencies and technical details of the various hardware and software failures, connecting the primary root cause of Boeing’s challenges with Starliner to its internal systems integration approach. It’s a well-crafted, logical, data-driven analysis.

But to support the conclusions around NASA’s failure as a culture and the deficiencies of its “hands-off” contract approach, the report focuses on “interviews” with NASA team members (quotes not provided) rather than actual hard data. The report claims that “NASA’s adoption of a commercial services procurement strategy . . . contributed to the creation of the previous intermediate causes and organizational factors that produced insufficient data for NASA to fully understand system qualification of the Starliner spacecraft.”

Translation: Two NASA astronauts were stranded on ISS because the contract did not permit NASA to dictate to Boeing how to build Starliner.

If the hands-off approach worked for SpaceX, why did it not work for Boeing? The report covers that too by emphasizing that you cannot compare SpaceX and Boeing apples-to-apples because “attempting direct comparisons, especially in a given timeline where the development cycles are in different phases, results in unbalanced conclusions.” That does not make any sense. Of course you can compare the two companies with each other: One company employed successful engineering and systems integration practices, and one company did not.

The recommendations are even more telling. While a large portion of them focus on the necessary technical corrections to ensure proper performance of the Starliner spacecraft, the rest are concerned with NASA’s direct oversight of how Boeing does business. For example, “reassess contract structures to align oversight with risk and ensure access to technical expertise” and “for development vehicles, the provider and NASA must partner in the development and qualification plan to known troublesome systems during the design phase. Make this contractually required.”

In other words, no more letting companies build rockets and spacecraft based on modern engineering best practices. They have to do it the NASA way, even if the processes are derivations of the way business was done by NASA in the 1960s.

You may be wondering, what does this have to do with a space economy? Simply put, SpaceX’s ability to be the best and most affordable option for launch and crew transportation is tied directly to the investment NASA made in the commercial crew and cargo program that featured this hands-off approach. Few dispute this fact. In fact, most space experts acknowledge that the only way to have an economy in space is to make launch and spacecraft operations more affordable.

So, if commercial contracts provide good outcomes, why not keep going down the same path? That is the billion-dollar question, tied to various interests across the enterprise. For Boeing, it is obvious why they prefer a hands-on approach. As a legacy aerospace company, they have developed the ability to work very well with their NASA counterparts in a symbiotic relationship, relying on NASA’s expertise to get the job done — never mind how long it takes — or how much it costs the taxpayer.

Starliner was an outlier for Boeing in terms of the contractual relationship that has been most lucrative to them. For example, the Space Launch System (SLS), a cost-plus contract with no competition, has been ideal for Boeing and its business model. A few years ago, NASA tried to restructure SLS into a firm-fixed contract but failed, as it was mutually beneficial to the NASA bureaucracy and Boeing to keep it as a cost-plus procurement.

Conversely, that explains NASA’s desire to return to the old model. Most NASA engineers do not want to be simply looking over the shoulders of their industry counterparts; they want to be the doers of human spaceflight. Lacking the control that NASA enjoys in most other contracts, SpaceX is still despised by many NASA personnel and written off as a “unicorn company” — an unrepeatable (much less normative) phenomenon.

Ironically, this suits SpaceX just fine as well. Taking advantage of the infusion of capital from NASA in the early days of the company, SpaceX has successfully weaned itself off government dependence and is now ready to move on from its very successful NASA astronaut transportation service.

The big winner in SpaceX’s decision to retire its Dragon capsule? Boeing. To many, Starliner is the only option NASA has to replace Dragon. Once again, Boeing has leverage on the government. That’s good for them and whoever holds Boeing stock, as well as for any politicians who have Boeing employees in their district.

Meanwhile, the next crop of space companies is waiting on the sidelines to see if they will get the same chance SpaceX did over 20 years ago to prove their value to NASA and the American taxpayer. Given what was announced last week, they will likely have to wait a while.