This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
NASA Administrator Bill Nelson shared four key reasons his agency will continue to work with Boeing for crewed missions to the International Space Station (ISS) despite thruster problems on the latter’s spacecraft. These problems forced NASA to err on the side of caution and decide to bring the crew back on SpaceX’s Crew Dragon in February next year.
Administrator Nelson shared the reasons during yesterday’s media call, which announced NASA’s decision. According to him, the need to have two dissimilar spacecraft for sending astronauts and the structure of NASA’s contracts with Boeing are among the key reasons the pair will continue to work together in the future.
NASA Continues To Fund Boeing For Dissimilar Redundancy, “Arm’s Length” Contract & Long History With Boeing Including Work On SLS, Says Administrator Nelson
During the call yesterday when asked why his agency continued to fund Boeing, Nelson started by sharing that NASA needs “two spacecraft. To, uh, have the redundancy in case one is not available to take crew to and from the International Space Station.” This redundancy, also called a dissimilar redundancy, aims to ensure round the clock access to the station for astronauts as failures or problems on one spacecraft do not require NASA to ground the other because of safety considerations.
For the second reason, Nelson stated that NASA’s work with Boeing “is according to a arm’s length contract. And a contract that is a fixed price contract.” These contracts fix the amount that NASA pays its contractors over their lifetime, with any additional overruns or payments requiring approval. On the other hand, traditional contracts are typically cost plus, which is a pay as you go model that bills the contract awardee throughout the contract’s life cycle.
The third reason for NASA’s continuing partnership with Boeing is the extensive work that they have done on multiple projects. Nelson shared that “Boeing has been a great partner for NASA over the years. As a matter of fact, uh, the, big, uh Space Launch System, the SLS rocket is overall managed by Boeing. And, there has been a long history with Boeing.”
The SLS is the world’s most powerful operational rocket, and its first test flight was successful in November 2022 when it sent NASA’s Orion spacecraft into an orbit around the Moon. Orion is designed to take the first crew to lunar orbit before it docks with SpaceX’s Starship and returns America’s presence to the Moon after the Apollo program.
While he initially planned to list out three reasons, the Administrator ended his response with a bonus reason. He stated that the “fourth reason is that they [Boeing] were the successful bidder, along with, uh, uh, SpaceX. Because we had wanted two. So for all those reasons, that why I meant NASA does business with Boeing.” Starliner was initially slated to launch in 2017, but multiple slip ups have seen NASA stick with Boeing to reap the benefits of having two dissimilar vehicles capable of flying crew to the ISS.
NASA associate administrator Jim Free added that “Boeing operates the space station for us as well as the prime contractor for space station. And that’s in its 25th year. So we have a long and storied history with them there also.” He was joined by Ken Bowersox, the associate administrator for space operations.
Bowersox continued that “Boeing’s been a great partner with us on space station. And, and, and I think the key word is partner. A lot of people want to focus on the contractual relationship where we’re buying something from the company. This isn’t completely like that, right. I mean, we have a contract with Boeing, but it’s to work together to develop this capability for our country,” said Bowersox. “And we’ve had two good partners, Boeing and SpaceX, when it comes to commercial crew. And, when they have problems, we don’t just, uh, throw rocks at them, or tell them that we don’t like them. We work with them to get through those problems.”