Could you explain this further? You mean that these small contractor companies that NASA pays for work are upset because they make less from fixedprice contracts?

Just so we’re clear, everything I talk about here is not an endorsement of the capitalist system that gave rise to this situation. It’s just the historical facts. And when I speak positively about the accomplishments of SpaceX, I am only talking about the actual scientists and engineers and technicians doing the real work there, and not the know-nothing absentee shithead who owns most of the company.

In the early days of American spaceflight, the organizations with the most experience dealing with rockets were big for-profit defence contractors who arose out of WW2 and the early Cold War. There’s a lot of “dual use” technologies in spaceflight. A powerful rocket can send a weather satellite into orbit - or it can drop a nuclear warhead anywhere on the planet. A lot of the early US orbital rockets were actually repurposed ICBMs. For example, both the Mercury and Gemini crew vehicles launches on modified ICBMs.

Spaceflight R&D was seen as a risky investment in the early days, so NASA was often forced by the US senate to contract with those defence contractors under “cost-plus” terms. The short version is that if those contractors ran into unexpected cost overruns in development of these new technologies, they could just send NASA new bills to cover those costs and protect their profit margins. As the years went on the military-industrial complex became more entrenched. American senators became more accustomed to all the legal campaign-contribution bribery that those defence contractors offered. NASA management wanted to get value for money and do a lot more in their science missions, but it became harder and harder for NASA to fight the MIC and their bought-and-paid-for senators who just saw NASA as a piggybank to be raided.

A few decades ago NASA management took advantage of some political/cultural/technological shifts (which is a whole book in itself) and were able to offer fixed-price contracts for large projects. Fixed-price contracts are exactly what they sound like. If there’s cost overruns, the contracted company legally eats the costs instead of passing them along to NASA. And the companies don’t get it all in one lump sum at the start, they need to accomplish milestones before getting the cash related to those milestones. For example, if a fixed-price contract for $50 million was awarded but the contracted company failed to meet their first milestone, they’d get basically nothing and NASA would keep the $50 million.

At first these fixed-price contracts were offered for small projects, the kinds that the defence contractors usually ignored. For example, NASA might offer a contract up for a company to make a few dozen cubesats. Boeing wouldn’t care, but maybe some independent electronics startups would be interested and willing to take the risk on the contract. These startups pretty much all had the attitude “better we get fixed-price something than nothing”. And they also saw it as a foot in the door with NASA. If they could deliver on some small contracts, maybe NASA would keep them in mind for a medium contract.

NASA was also helping these fixed-price-type startups with technology help. They’d provide reference designs, blueprints, research papers, access to testing equipment and facilities, etc. For example, SpaceX’s Merlin engine (which powers its current Falcon 9 rocket) was originally based on NASA’s experimental Fastrac engine.

The companies who took them up on those fixed-price contracts tended to be new startups with no legacy MIC ties. The most successful and famous is of course SpaceX, but there’s thousands of them by now, handling all sorts of aerospace hardware from the smallest sensors to full-scale orbital rockets. The old defence contractors are pissed about this. They aren’t getting as big a cut anymore. American senators who get MIC cash have to grit their teeth and publicly congratulate NASA on being good stewards of taxpayers’ money because it would be political suicide to do otherwise.

Which brings us full circle to Starliner and Crew Dragon.

The Commercial Crew Program was intended to make sure that the US always had a way to get astronauts to orbit. The basic idea was to have two independently-developed crew vehicles that could also be flown on multiple types of rockets. If one crew vehicle showed a design flaw and had to be redesigned/rebuilt, the other vehicle would still be available. And if one of the booster rockets showed a similar design flaw, both vehicles would be able to fly on other booster rockets. (In practice the rocket-swapability will likely never be used, the two rockets now involved - Atlas V and Falcon 9 - are renowned for their reliability.) This would prevent the sort of capabilities gap that happened after the Challenger and Columbia disasters.

There were many bidders but in the end two won. Boeing with a traditional capsule design that would become Starliner. And SpaceX with a design derived from the Cargo Dragon module that they were already using to deliver cargo to/from the ISS. Boeing got a $4.2 billion contract, on the basis that they were the more reliable choice due to their aerospace experience. SpaceX got a $2.6 billion contract.

The result has been Boeing taking billions in losses because they built a shitshow. Boeing is years late, all three Starliner test launches have been partial failures. SpaceX came under budget, delivering a reliable, capable vehicle. Nine successful Crew Dragon missions to the ISS, eight of them carrying astronauts. SpaceX has since won all the additional mission contracts, because Boeing was fucking things up so badly with Starliner that NASA couldn’t count on them to ever deliver.

So in the end, the Commercial Crew Program proved itself. It lessened the chances of the US losing crew access to orbit if a crew vehicle had a design flaw and had to be grounded. And it made sure that NASA wouldn’t be on the hook for cost overruns.

Is Boeing one of these “old defence contractors”?

Absolutely. They are as old and big as it gets.

Yes, Boeing made the first stage of the Saturn V.

‘Defense contractor’ and ‘small’ are oxymorons. The old guard, Boeing, Lockheed Martin, Northrop Grumman, Rocketdyne, etc. all got used to cost-plus contracts and so geared their production assuming they’d always have them. Now they’re big mad that SpaceX and others are upstaging them in cost, performance and scale because, surprise surprise, decades of no accountability doesn’t foster competence.

Rocket production has always been a public/private partnership, the only difference is SpaceX takes commercial customers too, not just governments (or companies who basically are part of their government).

To elaborate on fixed price vs cost plus contracts: starliner was a fixed price contract of $4.2 billion. Which means NASA gave boeing $4.2 billion to develop starliner. Any costs incurred over that amount would not get billed to NASA and comes out of boeing’s pockets.

How defense/aerospace usually operates is cost plus. At the end of/during development, no matter how much money it costs, boeing gets to bill NASA for all development costs plus an additional fee.

Aerospace/defense is full of so many inefficiencies and delays that the ending cost of development is always much more than the initial pitch.