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NASA snubbed SpaceX, common sense to overpay Boeing for astronaut launches, says audit

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A detailed government audit has revealed that NASA went out of its way to overpay Boeing for its Commercial Crew Program (CCP) astronaut launch services, making a mockery of its fixed-price contract with the company and blatantly snubbing SpaceX throughout the process.

Over the last several years, the NASA inspector general has published a number of increasingly discouraging reports about Boeing’s behavior and track-record as a NASA contractor, and November 14th’s report is possibly the most concerning yet. On November 14th, NASA’s Office of the Inspector General (OIG) published a damning audit titled “NASA’s Management of Crew Transportation to the International Space Station [ISS]” (PDF).

Offering more than 50 pages of detailed analysis of behavior that was at best inept and at worst deeply corrupt, OIG’s analysis uncovered some uncomfortable revelations about NASA’s relationship with Boeing in a different realm than usual: NASA’s Commercial Crew Program (CCP). Begun in the 2010s in an effort to develop multiple redundant commercial alternatives to the Space Shuttle, prematurely canceled before a US alternative was even on the horizon, the CCP ultimately awarded SpaceX and Boeing major development contracts in September 2014.

Crew Dragon approaches the ISS on March 3rd during DM-1, the spacecraft’s uncrewed orbital launch debut. (NASA)
Boeing’s Orbital Flight Test (OFT) Starliner spacecraft prepares for flight on November 3rd. (Boeing)

NASA awarded fixed-cost contracts worth $4.2 billion and $2.6 billion to Boeing and SpaceX, respectively, to essentially accomplish the same goals: design, build, test, and fly new spacecraft capable of transporting NASA astronauts to and from the International Space Station (ISS). The intention behind fixed-price contracts was to hold contractors responsible for any delays they might incur over the development of human-rated spacecraft, a task NASA acknowledged as challenging but far from unprecedented.

Off the rails

The most likely trigger of the bizarre events that would unfold a few years down the road began in part on June 28th, 2015 and culminated on September 1st, 2016, the dates of the two catastrophic failures SpaceX’s Falcon 9 rocket has suffered since its 2010 debut. In the most generous possible interpretation of the OIG’s findings, NASA headquarters and CCP managers may have been shaken and not thinking on an even keel after SpaceX’s second major failure in a little over a year.

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Under this stress, the agency may have ignored common sense and basic contracting due-diligence, leading “numerous officials” to sign off on a plan that would subvert Boeing’s fixed-price contract, paying the company an additional $287 million (~7%) to prevent a perceived gap in NASA astronaut access to the ISS. This likely arose because NASA briefly believed that SpaceX’s failures could cause multiple years of delays, making Boeing the only available crew transport provider for a significant period of time. Starliner was already delayed by more than a year, making it increasingly unlikely that Boeing alone would be able to ensure continuous NASA access to the ISS.

As NASA attempted to argue in its response to the audit, “the final price [increase] was agreed to by NASA and Boeing and was reviewed and approved by numerous NASA officials at the Kennedy Space Center and Headquarters”. In the heat of the moment, perhaps those officials forgot that Boeing had already purchased several Russian Soyuz seats to sell to NASA or tourists, and perhaps those officials missed the simple fact that those seats and some elementary schedule tweaks could have almost entirely alleviated the perceived “access gap” with minimal cost and effort.

The OIG audit further implied that the timing of a Boeing proposal – submitted just days after NASA agreed to pay the company extra to prevent that access gap – was suspect.

“Five days after NASA committed to pay $287.2 million in price increases for four commercial crew missions, Boeing submitted an official proposal to sell NASA up to five Soyuz seats for $373.5 million for missions during the same time period. In total, Boeing received $660.7 million above the fixed prices set in the CCtCap pricing tables to pay for an accelerated production timetable for four crew missions and five Soyuz seats.”

NASA OIG — November 14th, 2019 [PDF]

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In other words, NASA officials somehow failed to realize or remember that Boeing owned multiple Soyuz seats during “prolonged negotiations” (p. 24) with Boeing and subsequently awarded Boeing an additional $287M to expedite Starliner production and preparations, thus averting an access gap. The very next week, Boeing asked NASA if it wanted to buy five Soyuz seats it had already acquired to send NASA astronauts to the ISS.

Bluntly speaking, this series of events has three obvious explanations, none of them particularly reassuring.

  1. Boeing intentionally withheld an obvious (partial) solution to a perceived gap in astronaut access to the ISS, exploiting NASA’s panic to extract a ~7% premium from its otherwise fixed-price Starliner development contract.
  2. Through gross negligence and a lack of basic contracting due-diligence, NASA ignored obvious (and cheaper) possible solutions at hand, taking Boeing’s word for granted and opening up the piggy bank.
  3. A farcical ‘crew access analysis’ study ignored multiple obvious and preferable solutions to give “numerous NASA officials” an excuse to violate fixed-price contracting principles and pay Boeing a substantial premium.

Extortion with a friendly smile

The latter explanation, while possibly the worst and most corruption-laden, is arguably the likeliest choice based on the history of NASA’s relationship with Boeing. In fact, a July 2019 report from the US Government Accountability Office (GAO) revealed that NASA was consistently paying Boeing hundreds of millions of dollars worth of “award fees” as part of the company’s SLS booster (core stage) production contract, which is no less than four years behind schedule and $1.8 billion over budget. From 2014 to 2018, NASA awarded Boeing a total of $271M in award fees, a practice meant to award a given contractor’s excellent performance.

In several of those years, NASA reviews reportedly described Boeing’s performance as “good”, “very good”, and “excellent”, all while Boeing repeatedly fumbled SLS core stage production, adding years of delays to the SLS rocket’s launch debut. This is to say that “numerous NASA officials” were also presumably more than happy to give Boeing hundreds of millions of dollars in awards even as the company was and is clearly a big reason why the SLS program continues to fail to deliver.

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Boeing completed a most-successful Starliner pad abort test earlier this month, the spacecraft’s first integrated flight of any kind.

Ultimately, although NASA’s concern about SpaceX’s back-to-back Falcon 9 failures and some combination of ineptitude, ignorance, and corruption all clearly played a role, the fact remains that NASA – according to the inspector general – never approached SpaceX as part of their 2016/2017 efforts to prevent a ‘crew access gap’. Given that the CCP has two partners, that decision was highly improper regardless of the circumstances and is made even more inexplicable by the fact that NASA was apparently well aware that SpaceX’s Crew Dragon had significantly shorter lead times and far lower costs compared to Starliner.

This would have meant that had NASA approached SpaceX to attempt to mitigate the access gap, SpaceX could have almost certainly done it significantly cheaper and faster, or at minimum injected a bit of good-faith competition into the endeavor.

Finally and perhaps most disturbingly of all, NASA OIG investigators were told by “several NASA officials” that – in spite of several preferable alternatives – they ultimately chose to sign off Boeing’s demanded price increases because they were worried that Boeing would quit the Commercial Crew Program entirely without it. Boeing and NASA unsurprisingly denied this in their official responses to the OIG audit, but a US government inspector generally would never publish such a claim without substantial confidence and plenty of evidence to support it.

According to OIG sources, “senior CCP officials believed that due to financial considerations, Boeing could not continue as a commercial crew provider unless the contractor received the higher prices.” A lot remains unsaid, like why those officials believed that Boeing’s full withdrawal from CCP was a serious possibility and how they came to that conclusion, enough to make it impossible to conclude that Boeing legitimately threatened to quit in lieu of NASA payments.

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All things considered, these fairly damning revelations should by no means take away from the excellent work Boeing engineers and technicians are trying to do to design, build, and launch Starliner. However, they do serve to draw a fine line between the mindsets and motivations of Boeing and SpaceX. One puts profit, shareholders, and itself above all else, while the other is trying hard to lower the cost of spaceflight and enable a sustainable human presence on the Moon, Mars, and beyond.

Check out Teslarati’s Marketplace! We offer Tesla accessories, including for the Tesla Cybertruck and Tesla Model 3.

Eric Ralph is Teslarati's senior spaceflight reporter and has been covering the industry in some capacity for almost half a decade, largely spurred in 2016 by a trip to Mexico to watch Elon Musk reveal SpaceX's plans for Mars in person. Aside from spreading interest and excitement about spaceflight far and wide, his primary goal is to cover humanity's ongoing efforts to expand beyond Earth to the Moon, Mars, and elsewhere.

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Tesla engineers deflected calls from this tech giant’s now-defunct EV project

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Image Created by Grok

Tesla engineers deflected calls from Apple on a daily basis while the tech giant was developing its now-defunct electric vehicle program, which was known as “Project Titan.”

Back in 2022 and 2023, Apple was developing an EV in a top-secret internal fashion, hoping to launch it by 2028 with a fully autonomous driving suite.

However, Apple bailed on the project in early 2024, as Project Titan abandoned the project in an email to over 2,000 employees. The company had backtracked its expectations for the vehicle on several occasions, initially hoping to launch it with no human driving controls and only with an autonomous driving suite.

Apple canceling its EV has drawn a wide array of reactions across tech

It then planned for a 2028 launch with “limited autonomous driving.” But it seemed to be a bit of a concession at that point; Apple was not prepared to take on industry giants like Tesla.

Wedbush’s Dan Ives noted in a communication to investors that, “The writing was on the wall for Apple with a much different EV landscape forming that would have made this an uphill battle. Most of these Project Titan engineers are now all focused on AI at Apple, which is the right move.”

Apple did all it could to develop a competitive EV that would attract car buyers, including attempting to poach top talent from Tesla.

In a new podcast interview with Tesla CEO Elon Musk, it was revealed that Apple had been calling Tesla engineers nonstop during its development of the now-defunct project. Musk said the engineers “just unplugged their phones.”

Musk said in full:

“They were carpet bombing Tesla with recruiting calls. Engineers just unplugged their phones. Their opening offer without any interview would be double the compensation at Tesla.”

Interestingly, Apple had acquired some ex-Tesla employees for its project, like Senior Director of Engineering Dr. Michael Schwekutsch, who eventually left for Archer Aviation.

Tesla took no legal action against Apple for attempting to poach its employees, as it has with other companies. It came after EV rival Rivian in mid-2020, after stating an “alarming pattern” of poaching employees was noticed.

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Tesla to a $100T market cap? Elon Musk’s response may shock you

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There are a lot of Tesla bulls out there who have astronomical expectations for the company, especially as its arm of reach has gone well past automotive and energy and entered artificial intelligence and robotics.

However, some of the most bullish Tesla investors believe the company could become worth $100 trillion, and CEO Elon Musk does not believe that number is completely out of the question, even if it sounds almost ridiculous.

To put that number into perspective, the top ten most valuable companies in the world — NVIDIA, Apple, Alphabet, Microsoft, Amazon, TSMC, Meta, Saudi Aramco, Broadcom, and Tesla — are worth roughly $26 trillion.

Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI

Cathie Wood of ARK Invest believes the number is reasonable considering Tesla’s long-reaching industry ambitions:

“…in the world of AI, what do you have to have to win? You have to have proprietary data, and think about all the proprietary data he has, different kinds of proprietary data. Tesla, the language of the road; Neuralink, multiomics data; nobody else has that data. X, nobody else has that data either. I could see $100 trillion. I think it’s going to happen because of convergence. I think Tesla is the leading candidate [for $100 trillion] for the reason I just said.”

Musk said late last year that all of his companies seem to be “heading toward convergence,” and it’s started to come to fruition. Tesla invested in xAI, as revealed in its Q4 Earnings Shareholder Deck, and SpaceX recently acquired xAI, marking the first step in the potential for a massive umbrella of companies under Musk’s watch.

SpaceX officially acquires xAI, merging rockets with AI expertise

Now that it is happening, it seems Musk is even more enthusiastic about a massive valuation that would swell to nearly four-times the value of the top ten most valuable companies in the world currently, as he said on X, the idea of a $100 trillion valuation is “not impossible.”

Tesla is not just a car company. With its many projects, including the launch of Robotaxi, the progress of the Optimus robot, and its AI ambitions, it has the potential to continue gaining value at an accelerating rate.

Musk’s comments show his confidence in Tesla’s numerous projects, especially as some begin to mature and some head toward their initial stages.

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Celebrating SpaceX’s Falcon Heavy Tesla Roadster launch, seven years later (Op-Ed)

Seven years later, the question is no longer “What if this works?” It’s “How far does this go?”

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SpaceX's first Falcon Heavy launch also happened to be a strategic and successful test of Falcon upper stage coast capabilities. (SpaceX)

When Falcon Heavy lifted off in February 2018 with Elon Musk’s personal Tesla Roadster as its payload, SpaceX was at a much different place. So was Tesla. It was unclear whether Falcon Heavy was feasible at all, and Tesla was in the depths of Model 3 production hell.

At the time, Tesla’s market capitalization hovered around $55–60 billion, an amount critics argued was already grossly overvalued. SpaceX, on the other hand, was an aggressive private launch provider known for taking risks that traditional aerospace companies avoided.

The Roadster launch was bold by design. Falcon Heavy’s maiden mission carried no paying payload, no government satellite, just a car drifting past Earth with David Bowie playing in the background. To many, it looked like a stunt. For Elon Musk and the SpaceX team, it was a bold statement: there should be some things in the world that simply inspire people.

Inspire it did, and seven years later, SpaceX and Tesla’s results speak for themselves.

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Credit: SpaceX

Today, Tesla is the world’s most valuable automaker, with a market capitalization of roughly $1.54 trillion. The Model Y has become the best-selling car in the world by volume for three consecutive years, a scenario that would have sounded insane in 2018. Tesla has also pushed autonomy to a point where its vehicles can navigate complex real-world environments using vision alone.

And then there is Optimus. What began as a literal man in a suit has evolved into a humanoid robot program that Musk now describes as potential Von Neumann machines: systems capable of building civilizations beyond Earth. Whether that vision takes decades or less, one thing is evident: Tesla is no longer just a car company. It is positioning itself at the intersection of AI, robotics, and manufacturing.

SpaceX’s trajectory has been just as dramatic.

The Falcon 9 has become the undisputed workhorse of the global launch industry, having completed more than 600 missions to date. Of those, SpaceX has successfully landed a Falcon booster more than 560 times. The Falcon 9 flies more often than all other active launch vehicles combined, routinely lifting off multiple times per week.

Falcon Heavy successfully clears the tower after its maiden launch, February 6, 2018. (Tom Cross)

Falcon 9 has ferried astronauts to and from the International Space Station via Crew Dragon, restored U.S. human spaceflight capability, and even stepped in to safely return NASA astronauts Butch Wilmore and Suni Williams when circumstances demanded it.

Starlink, once a controversial idea, now dominates the satellite communications industry, providing broadband connectivity across the globe and reshaping how space-based networks are deployed. SpaceX itself, following its merger with xAI, is now valued at roughly $1.25 trillion and is widely expected to pursue what could become the largest IPO in history.

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And then there is Starship, Elon Musk’s fully reusable launch system designed not just to reach orbit, but to make humans multiplanetary. In 2018, the idea was still aspirational. Today, it is under active development, flight-tested in public view, and central to NASA’s future lunar plans.

In hindsight, Falcon Heavy’s maiden flight with Elon Musk’s personal Tesla Roadster was never really about a car in space. It was a signal that SpaceX and Tesla were willing to think bigger, move faster, and accept risks others wouldn’t.

The Roadster is still out there, orbiting the Sun. Seven years later, the question is no longer “What if this works?” It’s “How far does this go?”

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