Report highlights NASA spending, management problems within Commercial Crew Program

Boeing flights will cost $90 million per seat; SpaceX will cost $55 million, NASA OIG report shows

NASA assigned nine astronauts to crew the first test flight and mission of both Boeing’s CST-100 Starliner and SpaceX’s Crew Dragon. From left to right: Sunita Williams, Josh Cassada, Eric Boe, Nicole Mann, Christopher Ferguson, Douglas Hurley, Robert Behnken, Michael Hopkins and Victor Glover. (Photo: NASA)

NASA is at risk of having a gap in transportation for astronauts to the International Space Station due to yearslong delays with the Commercial Crew Program and will pay Boeing millions of dollars more per seat to launch astronauts than what it will cost SpaceX, a report released by NASA’s Office of Inspector General shows.

Since the shuttle program ended in 2011, NASA has paid Russia to launch U.S. astronauts an average of $84 million per seat. NASA selected SpaceX and Boeing to develop spacecraft under the Commercial Crew Program to launch astronauts from the Space Coast.

Both companies are working to certify their spacecraft to fly crew: SpaceX with Crew Dragon launching on its Falcon 9 and Boeing with its CST-100 Starliner capsule launching on a United Launch Alliance Atlas V.

In a 53-page report, the Inspector General’s report shows NASA has paid Boeing $1.67 billion more than SpaceX to develop its Starliner spacecraft. In addition, NASA gave Boeing additional funds to make up for delays in development without offering the same monetary help to Boeing’s competitor, SpaceX, which has also faced development delays.

The report shows NASA agreed to pay Boeing an additional $287.2 million to ease the gap between Starliner’s third through sixth crewed missions. However, the OIG report says the additional compensation was “unnecessary” given the risk of a gap between missions was minimal when NASA agreed to pay the additional funds in 2016.

“For these four missions, NASA essentially paid Boeing higher prices to address a schedule slippage caused by Boeing’s 13-month delay in completing the ISS Design Certification Review milestone and due to Boeing seeking higher prices than those specified in its fixed-price contract,” the report said.

The OIG says if the goal was to minimize a gap between crewed flights, it should have also offered SpaceX a similar solution, however, it did not, “even though the company previously offered shorter production lead times than Boeing.”

NASA’s acting Associate Administrator of Human Exploration and Operations Mission Directorate Kenneth Bowersox disagreed with the OIG’s interpretation of the payments to Boeing.

In his Nov. 8 response to the report, Bowersox said the negotiations took place over six months and were “complex and extensive.”

“The final prices agreed to by NASA and Boeing were reviewed and approved by numerous NASA officials at the Kennedy Space Center and (NASA) Headquarters," Bowersox wrote.

When asked about the additional $287 million, a Boeing representative said it was negotiated with NASA “in a competitive environment.”

“We offered NASA additional flexibility and schedule resiliency to enhance future mission readiness by offering single-mission pricing for (missions 3-6) that was included in the pricing table in the original contract. This flexibility means Boeing is taking significantly more up-front financial risk and is already helping NASA with critical decisions key to optimizing future ISS operations. Doing so under the structure of the original contract would have increased cost and schedule uncertainty and would have limited NASA’s flexibility in mission planning. This also facilitates shorter lead time for NASA and provides more flexibility in adjusting launch dates within that lead time. Boeing is also now holding all of the up-front mission costs, which NASA will not have to pay until after each mission is officially ordered and given the Authority to Proceed.”

The Office of Inspector General report also highlights the launch-cost disparity between the companies.

Per seat, NASA will pay an average of $90 million to launch astronauts with Boeing and ULA, whereas SpaceX will launch for an average of $55 million per seat, according to the report.

A NASA OIG estimated the approximate average cost per seat assuming four astronauts per spacecraft and using publicly available information. Source: NASA OIG analysis of Agency information.

“As far as per-flight pricing is concerned, we offered a pricing table that remains unchanged,” a Boeing spokesperson said in an email to News 6. “Starliner development and flight prices incorporate the rigorous design, test and verification approach we proposed – leaving no stone unturned in making sure we deliver a quality vehicle and service to our customer. Because of our history in spaceflight, we understood how difficult this program would be on a short timeline, and priced our offering accordingly. Through accepting our bid, NASA agreed we would be delivering them significant value with a capsule that meets the original requirement of landing on land, can expand to five passengers, and allows positive control by NASA’s flight crews in all spaceflight phases.”

Reached by email, a SpaceX spokesperson provided this statement to News 6 on the OIG’s findings:

“SpaceX and NASA have worked in close partnership, applying all that we have learned from extensive testing and analysis to improve our systems and ensure Crew Dragon is one of the safest, most reliable spacecraft ever built. There is nothing more important to our company than human spaceflight, and we look forward to safely flying NASA astronauts to and from the International Space Station starting early next year.”

When will Commercial Crew astronauts begin launching?

NASA has paid Russia for flights through April 2020 but, according to the OIG report, both Boeing and SpaceX won’t be ready to fly missions with crew until Summer 2020, opening up the possibility of a gap in U.S. astronauts on the Space Station.

NASA Administrator Jim Bridenstine sent a letter to the Russian space agency on Oct. 24 requesting two additional seats on Soyuz: one for fall 2020 and one for spring 2021, according to NASA’s response to the OIG review.

Five years after the current Commercial Crew contracts, the program is several years behind schedule.

As of November, “Boeing and SpaceX each face significant safety and technical challenges with parachutes, propulsion and launch abort systems that need to be resolved prior to receiving NASA authorization to transport crew to the ISS,” the report said.

While the Commercial Crew test flight dates have been a moving target for some time, according to the report, it’s hard to tell when Boeing and SpaceX will get the go-ahead from NASA to launch astronauts.

The Commercial Crew launch dates will continue to be hard to establish because of the “unknown nature of the technical challenges remaining with each contractor’s certification activities," according to the OIG report.

Bowersox said the timeline for Commercial Crew flights will be updated when the new leadership is in place for the human exploration and operations mission directorate.

SpaceX is currently preparing for an in-flight abort test from Kennedy Space Center that will test the Crew Dragon’s emergency abort system in case of a Falcon 9 launch failure. SpaceX successfully launched Crew Dragon to the ISS in March and returned the capsule to Earth.

Meanwhile, Boeing is preparing for Starliner’s first test flight to the Space Station.

Check back for updates on this developing story.