Houston...We Have a Cost Problem: A Financial Analysis of NASA Contractors

A recent Government Accountability Office (GAO) report highlighted that 15 projects in the development phase of NASA’s acquisition process were responsible for $12 billion in cost overruns and cumulative schedule delays of 28 years. One possible culprit involves outside contractors, given they ultimately receive a significant piece of the NASA budget. Additionally, recent high-profile endeavors such as the Artemis program have faced scrutiny over their procurement strategies causing increases in costs and scheduling delays. Understanding patterns in historical data can provide valuable insights into cost management practices. In this study, we perform a comprehensive analysis of NASA contractors in terms of who is receiving contracts, what they are spending on, and how the contracts are structured. We use prime contractor data from 2008 to 2024 and find evidence that fixed price contracts are associated with smaller contract values, slower contract growth, and fewer modifications. We also find that fixed prices contracts are more likely to be awarded on a competitive basis, while research contracts are less likely to be awarded competitively. Furthermore, district-level representation on the House, Science, Space, and Technology Committee is associated with competitive contracts, suggesting that political influence plays a role in the selection process. Overall, this study underscores the importance of transparent, data-driven evaluation in optimizing NASA’s resource allocation and enhancing mission planning strategies.