Op-Ed: Misuse of Commercial Programs Sets NASA Up for Failure
On February 19th, 2026, NASA Administrator Jared Isaacman announced the results of NASA’s independent review of the Boeing Starliner Crew Flight Test (CFT) anomaly investigation. Many issues were identified and discussed, but the primary takeaway was that the management and procurement model used by NASA, along with other organizational problems, is the true root cause of Starliner’s problems. This goes beyond the Boeing mismanagement discussed in connection with earlier flights, and suggests that the very basis of the Commercial Crew Program, the hands-off fixed-price development model, ensured that NASA would lose track of the state of the program and be unable to step in to adequately fix things when they were needed.
The Problem
An important note is what I mean when I say “development programs”. In this article, the term is used to refer to creating a brand new spacecraft or capability that is more than a simple upgrade or variant. For example, Dragon v2 would be considered a development program instead of an upgrade of Dragon 1, but Enhanced Cygnus and Cygnus XL would be upgrades or variants of the standard Cygnus design. Blue Moon MK2 in this context would also be a separate development than MK1 due to the much larger capability and significant design differences.
NASA employs two major categories of contracts on its development programs, cost plus and fixed price. Cost Plus contracts require the government to fulfill all of a program’s development costs, plus a fee to the contractor (the contractor’s only take-home money). This fee can be determined in different ways depending on the exact contract type, but it is generally either a fixed fee or a performance-based amount. Cost-Plus’s central concept is that in exchange for greater government involvement in the execution of the contract, via mandatory inspection points, day to day integration of teams, and broad data usage rights, the company will be insulated from financial losses. Fixed-price contracts pay the company an amount set at the time of contract signing for achieving various tasks and milestones, such as completing a design review or performing a test flight. This means that the company takes on nearly all the financial risk entailed by the contract. For a deeper dive into these types, see my earlier op-ed on the subject.
A firm-fixed-price contract is suitable for acquiring commercial products or commercial services (see parts 2 and 12) or for acquiring other supplies or services on the basis of reasonably definite functional or detailed specifications (see part 11) when the contracting officer can establish fair and reasonable prices at the outset, such as when-
Federal Acquisition Regulations Part 16.202-2, Application of Firm-Fixed-Price contracts:
(a) There is adequate price competition;
(b) There are reasonable price comparisons with prior purchases of the same or similar supplies or services made on a competitive basis or supported by valid certified cost or pricing data;
(c) Available cost or pricing information permits realistic estimates of the probable costs of performance; or
(d) Performance uncertainties can be identified and reasonable estimates of their cost impact can be made, and the contractor is willing to accept a firm fixed price representing assumption of the risks involved.
Let’s look at each of these points.
Reasonably Definite Specifications
NASA does provide basic requirements and specifications in their Request for Proposals releases, but in many cases those requirements change and evolve significantly over the course of a program. The Government Accountability Office’s 2025 report “NASA: Assessments of Major Projects” stated regarding the Gateway Power and Propulsion Element (PPE)’s firm-fixed-price contract, “The value of the PPE project’s contract has increased by 172 percent due to requirements changes to align the PPE’s capabilities to the needs of the Gateway. The total contract value is now over $1 Billion.” Similar issues affected the HALO habitat module.
Adequate Price Competition
In virtually all NASA development programs, there are at most two prime contractors working on the program. More companies could theoretically do the work in many cases, but the capabilities NASA develops usually do not currently exist and are not being sold. The inherent difficulty in doing something that has not been done recently, if ever, creates a risk that a vendor will incur so many unplanned expenses or delays that they either go bankrupt or decide to pull out. This has already happened on the xEVAS program, when Collins Aerospace decided to descope its contract due to an inability to execute on NASA’s schedule.
Reasonable Price Comparisons
On a fixed-price development program, it is categorically impossible for there to have been a similar service offered before. There had never been commercially owned and offered crew transportation vehicles, crewed or uncrewed lunar landers, lunar rovers, spacesuits, or space stations before their respective programs began. No cost or pricing data outside of that included in the contract bids exists and no comparisons can be made except against other bidders, after the contract type has been determined.
Realistic Cost Estimates and Performance Estimates
Humans are notoriously bad at estimating the costs of novel major projects. Every piece of infrastructure, every government or commercial space project, every battleship, every airplane, they all experience cost and schedule overshoots. Estimation of probable cost is attempted but frequently drastically undershoots before a program has entered a period of stable continuous production. That is the type of procurement fixed-price is designed to be used for.
Performance uncertainties and estimates of their impact are one of the main features of development. The whole point of the contract is to take the uncertainties in the proposed architecture and reduce them and their impacts until the design is mature and able to be produced and operated. In a development program it is again categorically impossible for this criteria to be satisfied.
A particular weakness of fixed price contracts is their inflexibility beyond the specific provisions and requirements. Returning to Starliner, a recurring theme in the set-up for the failures is the strictness of data rights in commercial programs. When a company is contracted for a product or service, be it as a prime or subcontractor, fulfillment of the requirements inevitably requires the use of proprietary data, processes, equipment, or so forth. In many cases, such as Aerojet’s thermal models of the Starliner thruster doghouses, only the outputs are delivered and not the proprietary processes used to make them.
Specifically, the internal componentry within each of the doghouses isn’t modeled in THERM-16. This area is modeled by Aerojet-Rocketdyne (AR) per contract with Boeing PROP. The contract only furnishes the results and not the model that produces the results. a.) AR model needs to undergoes [sic] accreditation. There is no NASA insight into the validity of the results and therefore verification effort is compromised.
Commercial Crew Program Control Board dus, May 2019
For other components, only drawings may be available. Although Boeing developed the NASA Docking System to NASA-provided specifications, and it was only used on Starliner and the NASA-owned and specified Orion capsule, neither Orion nor Starliner were allowed to collaborate with the docking system team. Such collaboration could allow it to be optimized for its host vehicles, but due to proprietary information and the docking port’s intent as a vehicle agnostic black box, the NDS team must be firewalled from both Starliner and Orion despite having no external commercial customers as of yet.
The prevalence of strict data rights and dependence on unchanging requirements means that such requirements are effectively NASA’s only form of control over the contractor on fixed-price contracts. NASA must trust that the contractor will work efficiently, quickly, and produce what NASA is after with little input other than design reviews and the requirements documents.
An Example
In a recent audit of NASA’s next-generation commercial space suits, the NASA Office of the Inspector General points out several of these issues and the lengths NASA has gone to to compensate.
Even though NASA acknowledged a service-based acquisition was risky because there was ‘no market’ for spacesuits, the Agency proceeded with this approach for xEVAS. In opting for a service-based acquisition—in which the Agency would essentially rent spacewalking services from a provider instead of owning the spacesuit hardware—NASA sought to replicate certain efficiencies realized in prior service-based contracts, such as those in the Commercial Crew and Human Landing System procurements.
NASA Office of the Inspector General
It goes on to point out that those prior programs had lead-in risk reduction programs, which there was not time to do for suits. NASA also wanted to retain its in-house space suit development work but did not require the bidders to use it. Suffice to say, the nicheness of the work and lack of market led to only two bidders, meaning that in order to ensure that both contractors had enough work to compete on future orders, the low earth orbit suit could not be competed. NASA also was forced to provide partial milestone payments because the financial viability of the contractors could not be assured if they were forced to complete certain full milestones before receiving their payment. Even after this, Collins decided to pull out, leaving NASA with a single contractor but stuck in a hands off role.
Despite Starliner being perhaps the most visible example of a commercial program gone wrong, it is far from unique in its problems. The issues laid out here, the rampant mismanagement across Boeing and NASA, and the age of the program combined to unmask the problems, whereas none of NASA’s other commercial programs except maybe HLS have truly reached their make or break moment yet. In the wake of the Starliner Crew Flight Test mishap and the numerous CLPS lander failures, NASA Administrator Jared Isaacman has stated that he believes NASA was too hands-off and should take charge more in the future. However, there does not appear to have been any action taken in this direction. Isaacman’s Moon Base initiative has resulted in an apparent doubling-down on the status quo for CLPS and no proposed changes to the HLS program, Commercial Crew program, or the xEVA project. If this disregarding of the pitfalls of commercial programs in favor of promoting nonexistent markets continues, it will only be a matter of time until cracks begin to spread across the board, jeopardizing the ability of NASA to pursue its Exploration goals and to be a global leader in space exploration.
