Trump aides discussed ending some SpaceX contracts, but found most were vital

Mint

20-07-2025

Elon Musk joined President Trump in the Oval Office in May as his role at the Department of Government Efficiency drew to a close.
For the U.S. government, breaking up with Elon Musk is easier said than done.
Just days after President Trump in early June raised the prospect of cutting ties with Musk's businesses, the Trump administration initiated a review of SpaceX's contracts with the federal government, according to people familiar with the matter. The review was intended to identify potential waste in the multibillion-dollar agreements the company has with the government, the people said.
But administration officials determined that they couldn't eliminate most of those contracts because they are critical to the Defense Department and NASA, the people said. The early assessment underscored the company's dominance as the world's pre-eminent rocket launcher and a major satellite-internet provider.
A White House official said the review of government contracts focused on a range of companies with lucrative government contracts.
Musk and SpaceX didn't respond to requests for comment.
Musk was once one of Trump's closest advisers, overseeing the cost-cutting effort known as the Department of Government Efficiency. But the relationship between the two men ruptured after the billionaire publicly criticized Trump's signature tax-and-spending bill.
On June 5, as Musk's social-media attacks turned personal, Trump posted on Truth Social that the easiest way to save federal dollars was to 'terminate" the government contracts for Musk's companies.
Days later, a senior General Services Administration official asked the Defense Department to fill out a spreadsheet with all of its current SpaceX contracts and other transaction agreements, according to an email described to The Wall Street Journal. The June 9 email was sent by Josh Gruenbaum, the GSA's commissioner for the Federal Acquisition Service. In the email, Gruenbaum said he planned to share the data with the White House.
Gruenbaum also made similar requests for information about SpaceX contracts to the National Aeronautics and Space Administration, and nearly half a dozen other federal agencies, according to an administration official. The spreadsheets, which are known as 'scorecards," included the value of the SpaceX contracts and whether a competitor could do the same job more effectively, this official said.
Instead of terminating SpaceX contracts after reviewing the data, White House and agency officials, including those at the Pentagon, determined that most of the deals were vital to the missions of the Defense Department and NASA, according to some of the people familiar with the matter. One of the people said some SpaceX contracts could face continued scrutiny.
SpaceX President Gwynne Shotwell met with White House officials in recent weeks as the review was ongoing, people familiar with the matter said.
SpaceX CEO Elon Musk gave Donald Trump, then the president-elect, a tour of the company's Starbase facility in Texas before a launch last November.
In struggling to find ways to reduce the government's dependence on SpaceX, the Trump administration highlighted how much agencies rely on the company's sophisticated technology. At least for now, the government has limited alternatives for many rocket launches and low-Earth-orbit satellite services, a situation that continues to give SpaceX—and Musk himself—an outsize role in space.
The government has been aware of this dynamic for years, and the Trump administration's review is the latest sign that policymakers are wrestling with the situation. SpaceX's dominance has also sparked frustration among industry rivals.
Government officials have expanded agencies' work with SpaceX because of the company's technology and prices. They have also pushed other space companies to step up and designed some contracts to stoke competition. Many rivals still have hurdles to overcome as they develop their own space vehicles and satellites, and race to get them into service.
Several companies have faced delays and technical challenges as they worked on products that would compete with SpaceX. Setbacks are common as engineers try to mature complex hardware designed for space, and Musk's company has faced its own problems of late with a new vehicle.
SpaceX executives have said the company believes strongly in competition, and its rockets often launch rivals' satellites to space. At an investor event in November, Shotwell said that the company has earned its contracts with the government by offering the best prices and executing.
This year, the company has won more government contracts and continued working on major missions following the spat between the president and Musk.
In April, SpaceX was awarded the most money and launches under a closely watched Pentagon contract, winning 28 national-security flights in a new deal valued at $5.9 billion. It launched an upgraded GPS satellite for the Space Force in May. NASA is planning to have SpaceX fly a new crew to the International Space Station at the end of this month.
The company's Falcon rockets, which rely on reusable boosters, have emerged as workhorses for government space missions. SpaceX's Crew Dragon spacecraft is the only U.S. vehicle certified to fly people to and from the space station.
Musk's threat—later walked back—to decommission Crew Dragon during his feud with Trump last month sparked worry inside NASA, the Journal previously reported. The agency has long wanted to have two different options for astronaut space-station missions.
SpaceX also has a growing business providing high-speed internet to government agencies through its Starlink satellite fleet. A SpaceX division called Starshield provides several national-security satellite capabilities, and secured a major classified deal a few years ago from the intelligence agency that operates U.S. spy satellites.
Write to Brian Schwartz at [e-mail], Shalini Ramachandran at [e-mail] and Micah Maidenberg at [e-mail]