Why Boeing Beat SpaceX in NASA’s Space-Taxi Contest4 min read

Boeing Co. BA -2.13% received consistently higher rankings than Space Exploration Technologies Corp. during NASA’s recent multibillion-dollar competition to build “space taxis,” according to an internal agency document.

Boeing's CST-100 spacecraft. The firm got higher rankings than SpaceX during NASA's space-taxi competition. NASA/Reuters

Boeing’s CST-100 spacecraft. The firm got higher rankings than SpaceX during NASA’s space-taxi competition. NASA/Reuters

The memo—dated Sept. 15 and reviewed by The Wall Street Journal—provides an inside look at the National Aeronautics and Space Administration’s deliberations and reveals why agency officials rated Boeing‘s bid better across the board than the one submitted by SpaceX, as the smaller company is called.

Chicago-based Boeing ended up with a contract worth up to $4.2 billion, versus $2.6 billion for Southern California-based SpaceX. The goal is to use company-owned and operated spacecraft to start transporting astronauts into orbit by 2017.

The rivalry was widely viewed as the closest head-to-head matchup yet between a big traditional aerospace contractor such as Boeing and a so-called new-space upstart represented by SpaceX.

But the 29-page document, signed by NASA’s associate administrator William Gerstenmaier the day before the awards were announced, depicts more of a one-sided contest. Boeing ranked above SpaceX in every major category, from technical maturity to management competence to likelihood of sticking to a timetable.

Boeing’s submission was considered “excellent” for “mission suitability,” whereas SpaceX got a “very good” ranking. The numerical scores for that category, according to one person familiar with the details, were separated by more than 60 points out of a possible 1,000. The document shows Boeing also garnered the highest ranking of “excellent” for technical approach and program management, compared with “very good” rankings for SpaceX.

Based on Boeing’s performance on a preliminary contract, NASA concluded it had “very high confidence” in that company’s likelihood of delivering what it promised—the highest ranking possible.

Despite SpaceX’s historic achievement of becoming the first commercial entity to put a capsule into orbit and ferry NASA cargo to and from the international space station, the agency had somewhat less assurance in the company’s ability to perform, also based on performance on its own preliminary contract. NASA determined it had “high confidence” in SpaceX’s pledges.

The document won’t become public until a protest by a third company, Sierra Nevada Corp., is resolved. Sierra Nevada, which didn’t receive any award but contends its rankings were comparable to the winners, has said the government could save $900 million by picking its proposal. Legal wrangling could drag on for months, potentially slowing down progress on the vehicles or putting work by Boeing or SpaceX on hold.

The September document, among other things, indicates that the bid by Sierra Nevada, based in Sparks, Nev., had “technical uncertainty and schedule risk” partly because “complex hardware and software development remained” to be done.

NASA, SpaceX and Sierra Nevada declined to comment on the document. A Boeing spokeswoman said the document “provides a clear indication of why Boeing was selected.” She said it also “shows our demonstrated technical ability” and ability to perform on schedule.

Neither Boeing nor SpaceX were deemed to have what NASA considered significant weaknesses in their proposals. But in explaining his final decision, Mr. Gerstenmaier pointed to what he saw as some uncertainties and shortcomings in SpaceX’s bid. They included reduced government insight into certain program details and SpaceX’s intention to install parts that haven’t been specially manufactured and tested to guard against negative impacts from radiation.

Using such “non-space radiation tolerant parts” is a critical design and “has big implications,” according to the document. Mr. Gerstenmaier, who heads NASA’s manned exploration efforts, said the approach “will take extra work and add both technical and schedule risk.”

The veteran NASA official said SpaceX’s “transition from cargo to crew” capsules is likely to be more complex than others inside NASA had projected, and he worried about SpaceX’s responsiveness to government requests or direction. In addition, Mr. Gerstenmaier expressed concerns about the company’s previous performance along with a “plan to develop its own docking system and space suit.”

Overall, according to Mr. Gerstenmaier’s analysis, “schedule planning was a recurring issue on SpaceX’s projects” over the years.

In sections of the memo focused on Boeing, Mr. Gerstenmaier concluded that the company’s team submitted “a very comprehensive, credible plan” amounting to a significant discriminator, and laid out “the most well-defined plan for addressing the specific issues” that surfaced in earlier work.

Citing Boeing for having “the best management approach,” the memo emphasized the company’s “effective organizational structure” and comprehensive efforts to keep track of myriad subcontractors. In summary, Mr. Gerstenmaier decided that “Boeing’s superior proposal, with regard to [the company’s] technical and management approach and its past performance,” was worth the higher price.

A NASA evaluation board, which submitted recommendations on the awards, identified Boeing’s strengths in program management, systems engineering and controlling lifecycle costs. Various Boeing subcontractors also had “excellent” or “very good performance” on relevant contracts, according to the memo.

The same panel determined that SpaceX had strong systems for quality management and resolving launch conflicts between customers.

Reflecting Boeing’s legacy working for NASA, Mr. Gerstenmaier said the company’s strong past performance should be valuable for success on the latest fixed-price contract. His memo, however, stressed that “I also recognized that most of this past effort was done under cost reimbursement contracts.”

Sebastien Clarke
Sebastien Clarke

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