How and why SpaceX is the reason Donald Trump administration cannot breakup with Elon Musk
SpaceX
's contracts with the federal government in early June, a report has said, adding that the evaluation aimed to identify potential waste within the company's multibillion-dollar agreements.
Citing sources familiar with the matter, a report by The Wall Street Journal says that after the review, the administration officials determined that most of these contracts could not be eliminated due to their critical importance to the Defense Department and NASA.
A White House official confirmed to the publication that the review focused not just on SpaceX but on a range of companies with 'lucrative'
government contracts
.
How Trump-Musk 'public spat' triggered review of SpaceX's government contracts
Musk, once a close advisor to Trump, overseeing the "Department of Government Efficiency" (DOGE) cost-cutting effort, saw his relationship with the US President fracture after publicly criticising Trump's tax-and-spending bill. On June 5, Trump posted on Truth Social suggesting to 'terminate' government contracts with Musk's companies to save federal funds.
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On June 9, Josh Gruenbaum, Commissioner for the Federal Acquisition Service at the General Services Administration (GSA), reportedly sent an email to the Defense Department requesting data detailing all current SpaceX contracts and other transaction agreements.
What Trump Administration officials concluded
Despite the initial intent to cut ties, White House and agency officials, including those at the Pentagon, concluded after reviewing the data that the majority of SpaceX's deals were vital to the core missions of the Defense Department and NASA.
The report noted that some contracts may still face ongoing scrutiny, and that SpaceX president Gwynne Shotwell met with White House officials during the review period.
The report suggests that the Trump administration is highly dependent on SpaceX as the government has limited alternatives for many critical rocket launches and low-Earth-orbit satellite services, making Musk and his company an asset in space operations.
Government agencies have expanded their work with SpaceX due to the company's technological capabilities and competitive pricing. While efforts have been made to foster competition through contract design and by encouraging other space companies to develop competing solutions, the report noted.
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