New Audit Reveals NASA Paid Boeing $2 Billion More Than SpaceX for Same ISS Mission

It's "not fair that Boeing gets so much more for the same thing," SpaceX CEO Elon Musk said.

Boeing is building the same project as SpaceX for $1.8 billion more.
Boeing is building the same project as SpaceX for $1.8 billion more. Tim Peake / ESA/NASA via Getty Images

In 2014, NASA awarded two multi-billion-dollar contracts to Boeing and SpaceX, commissioning them to each build a spaceship system that can transport U.S. astronauts to the International Space Station (ISS), in a move to end the space agency’s sole reliance on Russian Soyuz vehicles for this mission.

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The two companies are essentially building the same project for NASA, but for dramatically different prices. The contracts, awarded under NASA’s Commercial Crew Program (CCP), are valued at $4.3 billion for Boeing (BA) and $2.5 billion for SpaceX. But the preferential treatment doesn’t stop there. On top of Boeing’s already higher contract amount, NASA agreed to pay the company nearly $300 million extra, a new audit by the space agency’s Office of the Inspector General (OIG) has found.

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To transport astronauts to the ISS, Boeing plans to use its Starliner spacecraft and an Atlas V rocket, while SpaceX will be using the Dragon 2 capsule and Falcon 9 rocket. NASA awarded each contractor six round-trip crewed missions to the ISS. But due to the technical complexity of the project, both companies are currently running more than two years behind schedule.

Seeing a possible 18-month gap in NASA’s access to the ISS between Boeing’s second and third mission, NASA agreed to pay the company an additional $287.2 million above its existing contact to speed up Boeing’s third through sixth missions and to ensure that Boeing will continue as the agency’s second commercial crew provider, according to the audit report published on Thursday.

“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,” NASA’s Inspector General Paul Martin wrote in the report, adding that the compensation was “unnecessary” based on a 2016 analysis of the risk of delays between Boeing missions.

Boeing disagreed with Martin’s reasoning that the extra payment was to keep the company around for longer, noting that Boeing “has made significant investments in the commercial crew program” and is “fully committed to flying the CST-100 Starliner and keeping the International Space Station fully crewed and operational,” a Boeing spokesperson said in a statement.

Martin also raised the question of why NASA didn’t seem to consider SpaceX as a potential solution to the access gap problem. “Given that NASA’s objective was to address a potential crew transportation gap, we found that SpaceX was not provided an opportunity to propose a solution, even though the company previously offered shorter production lead times than Boeing,” he wrote.

Of the two companies’ current budget, Boeing’s costs for development and test flights were $2.2 billion, while SpaceX’s were $1.2 billion, the audit report estimated. Assuming that each mission will take four astronauts on board, the average cost per seat will be approximately $90 million on Boeing’s Starliner and $55 million on SpaceX’s Dragon 2.

“This doesn’t seem right,” tweeted SpaceX CEO Elon Musk in response to an Ars Technica report about NASA’s extra payments to Boeing, “meaning not fair that Boeing gets so much more for the same thing.”

New Audit Reveals NASA Paid Boeing $2 Billion More Than SpaceX for Same ISS Mission