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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.

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.

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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]

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.

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.

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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 Cybercab sightings broaden well outside of Austin with autonomy in focus

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Credit: Tesla Robotaxi | X

Tesla Cybercab sightings are broadening far and wide, well outside of downtown Austin, Texas, with autonomy in focus as the company plans to launch the all-electric, two-seater this evening in the Lone Star State.

Tesla is set to launch Cybercab to a small group of people this evening in a dedicated event in Austin, Texas. Public details on the event are relatively slim.

However, Tesla’s focus on Cybercab falls well outside of the downtown Austin area and is expanding well across the United States as things continue to move quickly with the company’s autonomous efforts in 2026. Today, various images of Cybercab fleets in interesting locations have started to circulate.

The most notable is a fleet of at least 20 Cybercabs at Miami International Airport in Florida. Spotted last night, the fleet is expansive and is indicative of a looming release of Cybercabs once regulatory boxes are checked off.

Tesla has already been operating the Robotaxi platform in Miami for several months, but this Cybercab fleet at the airport could be joining the ride-hailing platform as approvals arrive:

Another fleet of Cybercabs was spotted at the Devon, PA showroom just outside of Philadelphia. We have seen several Cybercab units testing around the Philadelphia Metro Area, which is interesting considering Tesla does not have any active Robotaxi geofence in Pennsylvania.

Philadelphia would be an ideal location to test ride-hailing due to its dense tourist population, large, sprawling city layout, and to compete with other ride-hailing companies that operate in the city.

Expansive fleets of Cybercabs will be popping up in and around major cities throughout the rest of the year, if we were betting on it. Tesla has made it obvious that the Cybercab rollout will be aggressive and fast-paced, but within reason. Tesla is still prioritizing safety, so these testing phases will likely go on for some period of time before more members of the public are able to snag a Cybercab for a personal chariot.

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Tesla Model Y L gets suspension complaints in over odd issue China

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Credit: @TeslaNewswire/X

The Tesla Model Y L is arguably the most hyped trim of the all-electric crossover, other than the Performance configuration that comes with white-knuckle speed and sports car-level handling.

However, it is not all perfect. Tesla owners in China who took delivery of the Model Y L, denoted with an L to highlight its longer wheelbase, are experiencing what they are referring to as “collapsing” of the rear wheels, as suspension issues appear to be an issue with some of the builds.

The gap between the wheel arch and tire has narrowed to the point that “not even a single finger” could fit, according to a report from Car News China. The failures are not tied to a specific mileage, as one owner said that after just 9,000 kilometers (5,600 miles), they noticed the suspension issue when their car was fully loaded.

Another one had the issue at 30,000 kilometers (18,640 miles) and noticed that the wheel gap shrank to two fingers, so not as drastic as the person who reported a similar issue at 9,000 km.

Tesla Model Y L is gaining momentum in China’s premium segment

Along with the visual recognition of the issue, others are saying the sagging is causing abnormal wear on the inside of the tires. Extra weight and instant torque already provide additional stress on the tires in electric vehicles during normal operation, so it is no surprise that this is another complaint.

There has been no recall issued by Tesla, and the company has not yet publicly acknowledged the issue.

Some are suggesting that owners use a “finger test” to self-diagnose whether there is an issue with the suspension. There should be four fingers between the tire and the wheel well; anything less than that starts to get dicey.

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Tesla Cybercab event gains steam ahead of massive launch

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Credit: TechOperator | X

Tesla is starting to truly tease and hype its groundbreaking Cybercab event, which takes place tomorrow in Austin, Texas. It will be the first time members of the public will be able to ride in a Cybercab, a vehicle without any manual controls, on public roads.

Tesla has been dropping some hype on X over the past several days, but this morning, the excitement has truly started to build up for the event. Although Cybercab has been unveiled before, this is truly Tesla’s announcement that it is ready to start offering autonomous rides for public passengers in its new ride-hailing-geared vehicle for the first time.

The hype has started with a variety of different social media posts that are a true indication that Tesla is preparing for something big. Teasing so much of the potential of Cybercab, including its ability to truly revolutionize how people hail rides for local travel, is what the big idea for the event entails. The time that many Tesla owners, fans, and investors have been waiting for is potentially here:

The event has remained slim on details. Even invitees are still awaiting true details about what the event will entail, where they’ll go, and what is in store for the evening. This is pretty typical for an event run by Tesla; they keep things under wraps for the most part until the very last minute.

However, there is no secret about what the real intention of Tesla is for this event: it is going to be a huge reveal party for a vehicle that has no steering wheel and no pedals. It is a truly massive step for the company moving forward.

Speculation persists as to whether this is going to be an event that simply announces that rides will begin with the Cybercab, or it will be something more substantial. Tesla has said in the past that they plan to sell the Cybercab to the general public in what could become a great way to earn passive income by adding it to a more global fleet of Robotaxi-geared vehicles.

Tomorrow, the show begins in Austin, and the Cybercab goes live at some capacity; we just don’t know exactly how quite yet.

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