In the early 2010s, NASA's Commercial Crew competition boiled down to three players: Boeing, SpaceX, and a Colorado-based company building a spaceplane, Sierra Nevada Corporation. Each had its own advantages. Boeing was the blue blood, with decades of spaceflight experience. SpaceX had already built a capsule, Dragon. And some NASA insiders nostalgically loved Sierra Nevada's Dream Chaser space plane, which mimicked the shuttle's winged design.
This competition neared a climax in 2014 as NASA prepared to winnow the field to one company, or at most two, to move from the design phase into actual development. In May of that year Musk revealed his Crew Dragon spacecraft to the world with a characteristically showy event at the company’s headquarters in Hawthorne. As lights flashed and a smoke machine vented, Musk quite literally raised a curtain on a black-and-white capsule. He was most proud to reveal how Dragon would land. Never before had a spacecraft come back from orbit under anything but parachutes or gliding on wings. Not so with the new Dragon. It had powerful thrusters, called SuperDracos, that would allow it to land under its own power.
"You’ll be able to land anywhere on Earth with the accuracy of a helicopter," Musk bragged. "Which is something that a modern spaceship should be able to do."
A few weeks later I had an interview with John Elbon, a long-time engineer at Boeing who managed the company’s commercial program. As we talked, he tut-tutted SpaceX’s performance to date, noting its handful of Falcon 9 launches a year and inability to fly at a higher cadence. As for Musk’s little Dragon event, Elbon was dismissive.
"We go for substance," Elbon told me. "Not pizzazz."
Elbon's confidence was justified. That spring the companies were finalizing bids to develop a spacecraft and fly six operational missions to the space station. These contracts were worth billions of dollars. Each company told NASA how much it needed for the job, and if selected, would receive a fixed price award for that amount. Boeing, SpaceX, and Sierra Nevada wanted as much money as they could get, of course. But each had an incentive to keep their bids low, as NASA had a finite budget for the program. Boeing had a solution, telling NASA it needed the entire Commercial Crew budget to succeed. Because a lot of decision-makers believed that only Boeing could safely fly astronauts, the company's gambit very nearly worked.
Scoring the bids
The three competitors submitted initial bids to NASA in late January 2014, and after about six months of evaluations and discussions with the "source evaluation board," submitted their final bids in July. During this initial round of judging, subject-matter experts scored the proposals and gathered to make their ratings. Sierra Nevada was eliminated because their overall scores were lower, and the proposed cost not low enough to justify remaining in the competition. This left Boeing and SpaceX, with likely only one winner.
"We really did not have the budget for two companies at the time," said Phil McAlister, the NASA official at the agency's headquarters in Washington overseeing the Commercial Crew program. "No one thought we were going to award two. I would always say, 'One or more,' and people would roll their eyes at me."
The members of the evaluation board scored the companies based on three factors. Price was the most important consideration, given NASA's limited budget. This was followed by "mission suitability," and finally, "past performance." These latter two factors, combined, were about equally weighted to price. SpaceX dominated Boeing on price.
Boeing asked for $4.2 billion, 60 percent more than SpaceX's bid of $2.6 billion. The second category, mission suitability, assessed whether a company could meet NASA's requirements and actually safely fly crew to and from the station. For this category, Boeing received an "excellent" rating, above SpaceX's "very good." The third factor, past performance, evaluated a company's recent work. Boeing received a rating of "very high," whereas SpaceX received a rating of "high."
While this makes it appear as though the bids were relatively even, McAlister said the score differences in mission suitability and past performance were, in fact, modest. It was a bit like grades in school. SpaceX scored something like an 88, and got a B; whereas Boeing got a 91 and scored an A. Because of the significant difference in price, McAlister said, the source evaluation board assumed SpaceX would win the competition. He was thrilled, because he figured this meant that NASA would have to pick two companies, SpaceX based on price, and Boeing due to its slightly higher technical score. He wanted competition to spur both of the companies on.
The room where it happened
The decision was to be made on August 6, during a meeting at NASA headquarters. The agency's head of human spaceflight, Bill Gerstenmaier, convened his top human spaceflight advisors in the agency's "Space Operations Center" at headquarters. This secure room was built after the Columbia accident in 2003 for high-level strategic meetings. Gerstenmaier and about 20 senior officials at NASA sat around a large, rounded table, discussing the source evaluation board scores with the aim of picking a winner.
After a presentation on the technical scores, Gerstenmaier asked each advisor for an opinion. These were the who's who of the US spaceflight community, many of whom, like Gerstenmaier, had come up in the Space Shuttle Program, long before the era of commercial space. As he went around the room, each person echoed the same response, "Boeing." First five people, then 10, and then 15. This seemed to please Gerstenmaier, known warmly as "Gerst" in the global spaceflight community, and encouraged potentially dissenting voices to fall in line. McAlister watched this cascade of pro-Boeing opinions sweep around the table, a building and unbreakable wave of consensus, with mounting horror.
"I'm freaking out because I could see them going with Boeing, which in my opinion was an inferior proposal, and only with Boeing," he said. "It was not groupthink; it's just that everyone at the time was comfortable with Boeing. SpaceX had only been flying cargo to the space station for two years."
Having only come to NASA in 2005, McAlister was not part of this human spaceflight firmament. Sitting to Gerstenmaier's right and reporting to him as the director of commercial space development, McAlister's mind whirled with possibilities for throwing himself in front of the oncoming bus. He knew that arguing SpaceX had presented the best proposal, based on price and technical merit, would get him nowhere.
Near the end of the discussion, Gerstenmaier solicited McAlister's opinion. In turn, McAlister started asking questions. First, he turned to Bill McNally, the agency's head of procurement. Prior to joining NASA, McNally had spent nearly three decades in acquisition for the US Air Force, managing the Tomahawk cruise missile program and leading technology contracts for the "Star Wars" missile defense program. McAlister asked if the veteran procurement official had ever seen a federal agency choose a bidder that cost 60 percent more when both bids were technically acceptable.
“He had to pick two”
McNally shifted uncomfortably in his seat at this question. Eventually he remarked that the source selection official, Gerstenmaier, could do whatever he pleased. McAlister pressed further, repeating the question. "No," McNally replied. "That would be uncharted territory."
Next, McAlister questioned the engineer representing safety and mission assurance, Deirdre Healey. When she had spoken, Healey said the safety division preferred Boeing as long as the company performed an in-flight test of its spacecraft's abort system—powerful thrusters that push the vehicle away in case the rocket malfunctions during launch. But Boeing did not plan to do so. Their bid included a ground test of this abort system, not one in flight. McAlister seized on this, asking Healey if this meant Boeing's proposal should really be considered unsatisfactory.
No, Healey replied, indicating the bid was acceptable to her.
Another member of the source evaluation board at the meeting, a deputy procurement manager from Johnson Space Center named Lee Pagel, said this question scored points for McAlister. It was strange that so many smart people thought NASA could just snap its fingers and Boeing would conduct an in-flight abort test. "In all my years of working with Boeing I never saw them sign up for additional work for free," he said.
After addressing his questions to McNally and Healey, McAlister turned to Gerstenmaier.
"I told Gerst he had to pick two," McAlister said. "His head of safety and mission assurance just said Boeing's proposal was unsatisfactory, and the head of procurement said the cost would be difficult to defend. And Elon sues everybody."
It was a very near thing
Typically, a decision is made at this meeting. But Gerstenmaier said he needed to think about all he had heard. He took another month. During this timeframe someone at NASA floated the idea of a "leader" and a "follower," with Boeing getting the lion's share of funding and SpaceX a small amount to keep going. But Musk rejected this immediately.
At the same time, McAlister kept pushing Gerstenmaier, telling him competition was essential to moving the program forward as Boeing and SpaceX strove against one another to build the safest, most reliable, and most cost-effective system. Eventually, Gerstenmaier agreed. He called the NASA administrator, Charlie Bolden, to say he was going to blow a hole in the agency's budget. Instead of asking Congress for $870 million in the budget for Commercial Crew the next fiscal year, NASA would need $1.25 billion.
It had been a very near thing. NASA officials had already written a justification for selecting Boeing, solely, for the Commercial Crew contract. It was ready to go and had to be hastily rewritten to include SpaceX. This delayed the announcement to September 16.
Seven years later, when Russia invaded Ukraine, tensions between NASA and Roscosmos, the Russian space agency, exploded. The pugnacious leader of Russia's space program, Dmitry Rogozin, blustered that he would kick NASA off the station. But because the US space agency had opted for competition between SpaceX and Boeing in its crew program, this was a hollow threat. Dmitry would dance with Dragons and get burned.
