Lunar Race II: Fixed-fee Lunar Exploration

The future of Lunar exploration is fixed… or at least the costs are fixed. NASA is now using commercial suppliers to provide rockets, landers, and more through new fixed-fee contracts. For decades, NASA would contract companies to innovate technologies and pay for the complete development and manufacturing process in addition to paying a fee. This meant that companies could become wildly over budget and extend development times for years with NASA picking up the bill. For decades, this kind of model funded aerospace companies that manufactured technologies exclusively for NASA. With fixed-cost contracts, companies are incentivized to get things done on time and on budget so they don’t lose money on government contracts, and they are also incentivized to find commercial uses for their products so that more customers can allow them to better cover their costs and potentially turn a profit.

This idea — that NASA is just another customer for aerospace companies — is baked into the new commercial space era, and it is both facilitating important changes and causing new issues. For instance, by providing contracts for space launches to both SpaceX for Crew Dragon and Boeing for Starliner, NASA for the first time in history is assured that the USA can’t be grounded when one kind of spacecraft is grounded. It also means that when one program gets delayed, like Starliner, other technologies can allow programs to continue forward.