Jared Isaacman backs fixed-price NASA contracts as nominee for space agency chief

Trump’s NASA pick Jared Isaacman pushes for fixed-price deals, reshaping agency funding and space industry dynamics.

Jared Isaacman attends a Senate Commerce, Science, and Transportation Committee confirmation hearing at the Russell Senate Office Building on Capitol Hill on April 9, 2025, in Washington, DC. Photo by Kevin Dietsch/Getty Images

By Anna Fadiah and Hayu Andini

Jared Isaacman, the tech billionaire who led the first all-civilian spaceflight and executed the first commercial spacewalk, is poised to become NASA’s next administrator under President Donald Trump’s nomination. As the CEO of Shift4 Payments and a veteran of private space missions, Isaacman has made it clear that his top priority is reshaping how NASA funds its missions—primarily through expanding the use of fixed-price contracts.

In testimony during his Senate confirmation hearing on April 9, Isaacman reinforced his stance: “Generally I am a fan of firm fixed-price contracts and being held accountable to what we bid.” That philosophy, if fully embraced, could overhaul decades of cost-plus contract practices, where NASA bore the brunt of budget overruns and delays.

NASA’s pivot toward fixed-price agreements is already underway. While just 35% of the agency’s contracts currently operate under this model, that figure is a dramatic shift from three decades ago, when virtually all funding used the cost-plus model. These newer deals are most common in NASA’s Artemis program, where they now make up around half of all contracts. Isaacman’s support signals a likely acceleration of this transformation.

A budget-conscious approach in a tighter fiscal era

The push for more fixed-price contracts comes at a time of fiscal scrutiny. On a recent Friday, the Trump administration proposed slashing NASA’s budget by $6 billion—a move that would mark the agency’s largest single-year funding cut in history.

Against that backdrop, fixed-price contracts are seen as a way to ensure better returns on limited federal spending. These agreements are more predictable for government planners and incentivize private companies to meet deadlines and stay within budget, or risk losing money.

One standout beneficiary has been SpaceX. Under Elon Musk’s leadership, the company has thrived with fixed-price contracts, securing over $22.2 billion in government deals since 2003. Its early success with NASA came from the Commercial Orbital Transportation Services (COTS) program, in which SpaceX received $278 million to develop cargo transportation to the International Space Station. That effort culminated in SpaceX becoming the first private firm to send a spacecraft to the ISS in 2012.

SpaceX COO Gwynne Shotwell has called the older cost-plus model “totally the wrong incentive,” emphasizing the need for efficiency and accountability in space development.

The risk burden shifts to private industry

While companies like SpaceX and Blue Origin have the resources to absorb risk, smaller startups face steeper challenges. Isaacman’s preferred fixed-price model requires firms to absorb cost overruns and delays on their own, often with limited access to private capital or a commercial market outside of NASA.

Astrobotic Technology, for example, won a nearly $80 million NASA contract in 2019 to land a robotic spacecraft on the moon. But after a failed mission caused by a faulty valve, CEO John Thornton pointed to fixed-price constraints as a key pressure point. “If you only have this much money and you run into a technical problem, what do you do?” he said. “It’s a pressure cooker.”

Similar struggles have hit Intuitive Machines, whose lunar landers have both tipped over during landing attempts. CEO Steve Altemus has voiced frustration that NASA’s model left companies footing the bill for research and development. “That put a financial strain on the [companies] and we saw some bankruptcies,” he warned.

Winners and losers in the lunar contract race

In 2019, NASA awarded multimillion-dollar contracts to three relatively obscure startups to deliver robotic landers to the moon. One dropped out before reaching launch, another tipped over on the lunar surface, and Astrobotic’s lander failed shortly after takeoff. Only Firefly Aerospace, with a $101.5 million contract, has successfully landed on the moon upright and intact in recent attempts.

These results reflect the tension between cost savings and mission reliability under fixed-price deals. Critics argue the model is ill-suited for pioneering technologies that lack a commercial market or deep-pocketed investors.

NASA’s former deputy administrator Lori Garver captured the core challenge: “The issue for companies is, can they stay in business long enough to develop?” For now, that pressure has led to an increasingly consolidated field dominated by billionaires like Musk and Jeff Bezos, whose companies can offset NASA’s shortfalls with their own wealth or capital access.

Historical context and policy shift

NASA’s approach to funding has dramatically shifted over the decades. During the Cold War space race, the agency received more than 4% of the federal budget to fuel innovation and beat the Soviet Union to the moon. At the time, unknowns in science and engineering justified massive government investment.

By the early 2000s, however, NASA’s budget had shrunk to around 0.5% of federal spending, where it remains today. In this constrained fiscal environment, NASA began experimenting with fixed-price agreements during its ISS cargo delivery programs, treating space transport like a parcel delivery service rather than a custom government project.

This approach gave private companies the intellectual property and freedom to serve other customers, helping launch commercial success stories like SpaceX’s Falcon 9 rocket.

Fixed-price pitfalls and industry concerns

Despite some success stories, many companies have struggled to meet NASA’s requirements within fixed-price constraints. Boeing’s development of the Starliner spacecraft has incurred over $2 billion in losses. Meanwhile, shifting requirements from NASA—such as sudden changes to lunar landing sites—have led to ballooning costs and delays.

In some cases, companies manage to deliver a product but find themselves without a market. The Center for Strategic and International Studies notes that “there is no indication of a lunar gold rush,” raising doubts about the long-term viability of moon-focused commercial ventures.

For startups that fail to gain traction, failed missions become expensive liabilities—not just for the companies, but for NASA and the American taxpayer.

A future shaped by billionaires—or policy?

Isaacman’s confirmation would position him to champion a fully fixed-price future at NASA. His track record, funding capabilities, and outspoken views align with an approach that shifts financial responsibility to private players while streamlining government spending.

Supporters argue this model fosters innovation and limits government waste. But skeptics worry it will deepen NASA’s reliance on a narrow band of powerful companies and individuals, potentially stifling competition and discouraging long-term investment in more complex, higher-risk technologies.

Astrobotic’s Thornton raised a crucial question: “Are we okay with the same players getting the same thing, which is where we were 20 years ago before SpaceX?”

As the Senate prepares to vote on Isaacman’s nomination, the broader space community watches closely. His confirmation could usher in a new era for NASA—one driven by market logic, tighter budgets, and unprecedented accountability, but also deeper risks and concentrated power. The outcome will determine whether fixed-price contracts become the rule rather than the exception, and how the next chapter of American space exploration is written.