Q&A: Former NASA commercial space director on the need for increased NASA-industry collaboration
The SpaceX Falcon 9 rocket that carried NASA’s Crew-3 astronauts to orbit in 2021. Credit: SpaceX
With NASA facing one of the largest budget cuts in its history, the agency and its leaders are looking to previous funding pullbacks for ideas on how big programs could be accomplished with fewer dollars.
The Trump administration’s fiscal 2026 budget, released in May, proposes cutting NASA’s overall budget by 24%. Funding for the Science Mission Directorate, which includes dollars for research conducted onboard the International Space Station, would be slashed by half.
One former NASA leader who has experienced such belt-tightening before is Phil McAlister, who for nearly 20 years led agency’s Commercial Space Division. McAlister sees some parallels between today and the 2000s, when then-President George W. Bush announced the space shuttle program would end. That led to the creation of the Commercial Resupply Services and Commercial Crew programs and a new way for NASA to do business with companies that helped jumpstart today’s commercial space industry.
Since then, NASA has increasingly implemented this public-private partnership model for various high-profile programs, including the landers for the Artemis moon program. A similar but slightly different method was chosen to seed funding to the handful of companies building space stations to succeed ISS, which is scheduled to be retired at the end of the decade. But in McAlister’s view, more needs to be done, especially if Congress approves Trump’s proposed $18.8 billion budget — which would be the agency’s smallest since the 1960s, when adjusted for inflation.
Since retiring last year, McAlister has been outspoken about what he sees as a need for NASA to clarify its relationship with the commercial space sector and its contracting methods. I interviewed him about how NASA should proceed through the current crossroads as he took a break from golf near his home in Savannah, Georgia.
Q: How do these proposed budget cuts change the outlook for NASA and commercial space activity?
A: These budget cuts, if anything, put more emphasis on the need for innovative public-private partnerships like we used for the Commercial Crew and cargo programs. A lot of people have asked me, after the success of Commercial Crew, what are the right conditions for a public-private partnership? There are several important things, but the first one is you have to have a constrained federal budget. If NASA had all the money in the world, they would just keep doing everything the way they did in the Apollo days or the space shuttle: super expensive, taking a long time, but getting exactly what they want, and generally getting very high-performance hardware. I’m the first to admit that NASA is really good at that, but the problem is when you don’t have that kind of money. Unfortunately, sometimes NASA continues to try and do too much with too little, or they continue to try and do the big projects that are actually squeezing out smaller projects. So in a time when you have decreasing budgets, there’s a significant premium on doing things innovatively, and especially relying on the strengths of the private sector. NASA needs to leverage private sector skills and capabilities more.
Q: Why has NASA struggled to adopt public-private partnerships more broadly?
A: It all comes down to control. In a cost-plus contract where the government owns all the hardware, you get exactly what you want, and you have control over everything. NASA is very comfortable with that approach; it’s in the culture and DNA. But with a fixed-price contract where private industry owns the hardware, they can use that hardware without NASA’s permission. Elon [Musk] could launch the Dragon capsules whether we liked it or not. NASA can pull their crew off, of course, but other than that, NASA isn’t really in control of those flights — which I think is great. Not because NASA is bad, but because we need more launches, more people and companies doing things in launch and in space.
The problem is, the world is changing. A space and aeronautics agency with total control, with cost-plus contracting, is not sustainable. Two presidential administrations have basically tried to cancel Artemis in terms of the Orion capsule and SLS rocket, to do things more efficiently.
In 2010, then-President Barack Obama canceled NASA’s Constellation moon program, but months later signed legislation that included funding for hardware that was later repurposed for the Artemis program. The Trump 2026 budget proposes phasing out Orion and SLS after Artemis III, but the July reconciliation package reintroduced funding for Artemis IV and subsequent missions. — PB
Unfortunately Congress, in my opinion, is not interested in that [doing things more efficiently]. But, if people truly want a better space program, a more efficient space program, that requires change and public-private partnerships. It also requires strong leadership, so the new administrator has their work cut out. Unless the administrator just wants to be a caretaker and let things go and hopefully nothing bad happens, they will have to drive change inside NASA that can leverage more of the private sector skills and capabilities than we do today. And that’s what the American public deserves.
Q: When has NASA done contracting right, and who is a good model for a future administrator?
A: NASA still uses the term “commercial partnership” with various contracts, such as the CLPS robotic payload missions to the moon, but in my opinion there are no comparables to Commercial Crew and the environment in which that was allowed to thrive.
Former Administrator Dan Goldin sort of started this whole thing with the “faster, better, cheaper” approach in the ’90s. Dan oversaw a very similar situation that we have today, declining budgets, criticisms on the performance of NASA’s large institutional programs and having to do more with less. There were a lot of people back then calling for NASA to change the way it does business, and Dan responded with “faster, better, cheaper.” That was initially very, very successful but then there were some very high-profile failures. [The Mars Climate Orbiter and Mars Polar Lander spacecraft were lost upon arrival at the red planet in 1998 and 1999, respectively. — PB]
The result was, NASA abandoned faster, better, cheaper and went back to the old way of doing business. Ultimately, though, that laid the groundwork for Commercial Crew and cargo. We had strong leadership that supported public-private partnerships in the Obama administration and in NASA, particularly with [former deputy administrator] Lori Garver, but after some controversy NASA began drifting away from the public-private model almost immediately.
We got Commercial Crew, and that was great. It used the funded Space Act Agreements in early development, leading to a fixed-price contract for services. By all measures, just about every conceivable metric, Commercial Crew and cargo were a resounding success. The biggest success was Dragon, which we used for cargo and then crew also obviously, but we also got the Cygnus cargo capsule. After Commercial Crew, few if any other major NASA programs used that kind of model, because many at NASA wanted more control. The problem is, if our space program is only NASA, then our aspirations in space are always limited by NASA’s budget.
Today, NASA has mostly continued the old way of doing business, with the exception being that they are pursuing more fixed-price contracts rather than purely cost-plus. But if you misapply fixed-price contracting, you’re asking for trouble. And that’s my fear — that NASA will abandon fixed-price contracting.
Q: When you arrived at NASA in 2005, the space shuttle was still launching. Did you know NASA was going to emphasize commercial contracts for the next generation of crew and cargo transport?
A: No, it was not evident at all. I started as adviser to the administrator for commercial space, so that was my focus, but not for the rest of NASA. But the administrator then, Mike Griffin, came up with the commercial cargo program, and that was the real start. The Office of Management and Budget had been telling NASA to apply more commercial contracting principles to its work. At that time, people were still in denial about the shuttle program ending, right up until the shuttles were retired and put in storage. We relied on Russian, European and Japanese cargo vessels and then the Cygnus by Orbital ATK [now Northrop Grumman], while astronauts flew only on the Russian Soyuz. Eventually, the changing relationship with Russia meant we did not want to continue buying seats on the Soyuz.
The stated goal for Commercial Crew was that NASA didn’t want to be the only customer for a product like Dragon. If a contractor like SpaceX could sell trips to space privately, that would help support development of the space technology. But I can tell you when SpaceX did start selling seats on Dragon to other customers, some at NASA weren’t comfortable with that. They thought, “What if something damages our launch pad, or there’s an anomaly and then our next astronaut launch is delayed?”
Q: We’re now five years away from the planned retirement of ISS. Is the U.S. ready for the transition to commercial space stations?
A: The bottom line is, it will be up to the current administration — in the White House and at NASA — for how we will handle the future of CLD [Commercial Low-Earth Orbit Destinations]. NASA doesn’t have the money to build and launch another space station on its own. Does NASA have to create an entirely new market for low-Earth orbit? Probably not, but you have to set up the program to enable that, and it has to be cost effective. If it’s super expensive, the only organizations or entities that can afford it are governments.
There are private companies with plans to do things in space after the ISS — pharmaceutical companies for example — but it’s not enough. People is where it’s at, either space tourists or researchers that want to go up. Not major tourism or big space hotels serving filet mignon or whatever, but smaller scale. NASA isn’t good at that because they want to eliminate all risk, but the commercial sector can operate differently. When we think about space stations, we think about science because that’s the way NASA has branded the ISS. Unfortunately, science is not a big enough non-NASA market. NASA has totally overplayed the results of the science that’s been done on ISS. There have been modest advancements in medical research and some other areas.
Q: Will there be a private station on orbit by 2030, and what do you think that will look like?
A: If it looks like we’re going to have a gap between the ISS and what comes after, there will be pressure on the politicians to extend the ISS. But the commercial space camp will say, “Give us some money and we can accelerate commercial presence in low-Earth orbit.” I can’t tell you which one will play out, but long term, ISS cannot stay up there forever, and particularly at a time when you have declining budgets.
We do need studies on how people can stay healthy living in space. But do you need a $3-4 billion platform to do that every year? No, I don’t believe you do, especially if there’s a non-government market and commercial companies that are willing and able to help. But if you do it wrong, you could kill it. Ultimately, we need a leader at NASA who is able to articulate what we will be doing in space for the next few years or decade.
