NASA commercial space, the 16%

If NASA commercial space is a thing, how much of a thing is it? Numbers can help provide part of an answer, but not all of the story. For that, we need context about NASA’s commercial programs, the rest of NASA, and the world in which NASA lives. Also, there is the 3rd law, where every action has a reaction. Having shifted with the times, is the shift likely to gain momentum or create pushback?

Two major NASA commercial, operational space programs – getting cargo and crew to the International Space Station. Credit:

By the numbers, in 2022, about 16% of NASA dollars will be spent on its commercial programs. A commercial program typically involves the government contracting with more than one provider focusing on a milestone, a result, or a service, at a firm fixed price. What else is there? Wouldn’t anyone spending this much money always have lined up some competitors to assure there is a backup? Wouldn’t the price always have been agreed to up-front? Wouldn’t the payment always have been withheld until delivery? No, no, and no. On the contrary, such commercial arrangements were rare for NASA until taking this route for getting cargo to the International Space Station, knowing the Space Shuttle’s days would soon be over.

This innovation by desperation, it’s been said, decided to take a risk and see what industry might do for much less cost if NASA were much less bureaucratic. It turns out you get much more for fewer dollars when it’s clear no more dollars are on the way, and you let industry innovate their way around this sea-change. Armies of analysts, number crunchers, and policy wonks are still trying to figure this out. Fortunately, most do not charge to these new projects.

For a bit of comparison, NASA’s overhead costs in 2022 stand at about 15%. That is, NASA is spending as much money on its new commercial partnerships with the private sector as it spends on overhead. (This is from taking NASA’s 2022 “Cross Agency Support,” a hodgepodge from facilities, to I/T, to physical security, and more, versus the yearly budget.) 

NASA Cross Agency Support. Credit:

Commercial – the view over time

Viewed over time, though, that laundry list of NASA’s overhead (or “support”) costs across the country and its projects was 21% ten years ago. Not that anyone wanted to step up and say that NASA needed to spend more on support. Naturally, overhead was told to make do with the same money year after year, dropping as a percentage as the NASA budget increased. The opposite happened for NASA programs opting to go commercial, which stood at only 9% of NASA spending ten years ago. While it’s tempting to wonder if NASA shifted overhead into commercial space hardware, the actual flow of money is likely very different. Albeit a dollar being a dollar, anyone pondering the fungibility of it all is asking a good question.

The NASA budget since 1995. As time passes, updated versions of this graph are on the page “The NASA budget since 1995.” Credit: Edgar Zapata,

Ten years ago, too, NASA’s commercial cargo program was well underway, with the first SpaceX Dragon cargo vehicle reaching the ISS in May of 2012. The commercial crew program followed. More recently, we see the commercial approach in a lunar lander and a lunar Gateway. If you plan to land on the Moon, you need a lunar lander. If your trip planning to get everyone to meet up includes a gathering in lunar orbit, you’ll need a small space station there too. Portions of these are commercial, fixed price, the power and propulsion for the Gateway, for example. Other portions, like the Gateway crew quarters, may have been rather traditional contracting at firstending up firm fixed price

Jumping to 100,000 feet to take in the view from above, we have four major NASA commercial space programs. Two of these are operational capabilities for getting cargo and crew to the International Space Station. The two other commercial programs are in development, the lunar lander and the Gateway, to eventually put NASA astronauts on the Moon.

Commercial space – where are these NASA programs located?

To be complete, though, NASA has a fifth major, operational commercial space program that gets little fanfare. It began way before commercial space was a thing. The NASA Launch Services Program is a NASA commercial space program of little notoriety. Here NASA buys launches on a commercial basis for its robotic science missions. Formed in the early 1980s, this program is located at Kennedy Space Center, which is also the home of the NASA commercial crew program (Florida). 

Interestingly, the commercial cargo program is located at Johnson Space Center (Texas), while the commercial lunar lander, which is now a reusable rocket program, is run out of Marshall Space Flight Center (Alabama). Lastly, Gateway’s NASA management is a bit all over – from Glenn to Johnson, to Goddard, and back to Kennedy Space Center. It turns out NASA’s commercial space programs have not only grown in funding, scale and complexity. They’ve spread infectiously across most NASA centers too.

Looking for a pattern in all this won’t find any just yet. Not that a data set of four (or five) should ever be expected to connect the dots. Commercial cargo program hardware tended toward the low hundreds of millions, whereas the commercial crew program *added a zero* to these figures, with hardware in the low billions. If you were placing bets, a lunar lander would tend in the lower billions too, as this is just like a crew spacecraft, or even simpler, as it does not need to come back to Earth. Except the low billions of a lunar lander, predictably of a scale of a commercial crew spacecraft, ended up being enough for NASA to contract with SpaceX for developing Starships. That includes a Starship booster with 33 engines. Better yet, this Starship will go to orbit like a Space Shuttle. And more tanker Starships (with their boosters) will refuel that first one, so it can leave for the Moon to get the lander job done for NASA. If the lunar landing bet were for an amount of NASA funding, you won! But if you predicted what that amount would be for, you would be not even wrong. (I speak from experience.)

NASA commercial space – what’s next?

There are more commercial programs in the wings for what comes after the International Space Station and for spacesuits. Yet, with the end of the ISS one day, the fate of NASA’s two major operational commercial programs would be in the air. Moving commercial cargo and crew to within an entire commercial space station paradigm could be the start of unprecedented growth in private sector markets. But, on the other hand, it could also be scaling back with reduced NASA demand. Would commercial cargo and crew services to orbit be ready to leave the NASA nest and grow, or would there be a failure to launch? NASA gladly reminds us in programs like the ISS that we are all connected. So, we should not be surprised, with Russia invading Ukraine, if plans for what comes after the ISS do not survive first contact with worldly events.

Seeing that 16% of NASA is so different than what came before, an observer might be an optimist or a pessimist. The optimist can see NASA managing a mutual fund for space exploration. Congress directs NASA to spend on specific programs, with orders including who and where particular to a district. These old-style programs live alongside these new commercial partnerships where Congress provides funds with plenty of leeway. Here NASA – go do what you have to do. No one could promise who would build a spacecraft for crew or if NASA would choose two partners instead of just one. Like a box of chocolates, with partnerships, a congressional representative is never sure what they are going to get. This mutual fund has all the stocks, from low risk to high risk to some cash for liquidity on the side. Competition among programs, and a dose of healthy chaos, come with imagining and innovation. It helps much more than hinders, in the end.

A pessimist, though, might wonder if all this mixing-and-matching makes sense. Competition is good, an essential element of partnerships, but is all this competing among interests too much of a good thing? A mission to the Moon must have a singularity of effort. Having been tossed such an assortment of project types, is NASA supposed to MacGyver its way to the Moon? If we have a USB cable, a bottle of chlorine, and a table leg, maybe we escape from the jail cell? Or not. Because as much as the space exploration portfolio has lots in it, we should not automatically expect it’s all we need.

No one could have predicted ten years ago just how diverse the NASA portfolio is today. Depending on your view, NASA’s latest holdings are diverse, more robust than ever, or all over the place and uncoordinated when so much else is also in flux. No wonder “challenges” is a fan favorite of NASA-speak. We know that 16% of the portfolio is trying new things, public-private, commercial, and adaptable by design. So while we may not have the data to spell out how this all goes, we do have a good idea of who is ready when change happens.

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