2025 Week 14 | The NASA CLPS Program is Declared a Success, but Companies and NASA are Still at Risk

I. Tracking

Brad Bailey, assistant deputy associate administrator for exploration in NASA’s Science Mission Directorate, recently stated that NASA’s Commercial Lunar Payload Services (CLPS) program has proven successful, citing Firefly’s Blue Ghost and other startup-operated lunar missions. However, with only one success out of four attempts, some question what NASA’s success threshold is. For startups and investors, it’s crucial to put NASA’s claim into context and evaluate the risks involved for the commercial sector.

Stepping away from commercial missions for a moment, it’s important to remember that NASA’s in-house projects have suffered setbacks much like the commercial missions, especially on their low-cost projects. While no other commercial mission has successfully completed its missions (such as Peregrine, or IM-2), some of the NASA funded payloads were able to still conduct research and therefore could be seen as partial failures… Or partial successes, in NASA’s optimistic eyes. With a fixed budget and specific objectives, even partial failures are a NASA win, offsetting development, testing, launch, and operational costs by relying on startups. In this symbiotic relationship, NASA has outsourced many expenses to startup investors, who accept the risks in hopes of securing significant government contracts (alongside a badge of confidence endorsement) and other business applications would arise. In that sense of mission objectives, NASA has succeeded and Brad Bailey is correct in hailing the CLPS program as a good strategy for NASA’s scientific and exploratory goals. Exploration bang for the buck, check. Minimizing government costs and passing on risks to the private sector? Check.

However, the impact on the commercial space sector is more muted. While some companies seek to sell their spacecraft services, NASA remains the primary customer for most of these missions, and the few non-NASA customers are also generally government-funded. The 'lunar economy' is not taking off. As certain startups prove their capabilities, NASA will likely choose lower-risk operators, and other companies risk losing their sole customer and face significant financial trouble.

The final aspect to review relates to capabilities and knowledge. Unlike NASA knowledge, which is institutional and well documented (one big advantage of government vs. private sector), any lunar landing startup that goes out of business would see its capabilities spread to various other companies or lost. While patents may be bought and engineers hired, this doesn’t replace the detailed documentation and lessons learned from NASA-managed projects. As a result, knowledge gaps may delay innovation, Humanity is already in this situation after having dropped lunar exploration from the docket in the 1970s, but when outsourcing capabilities to private entities, we’re losing even more. In that aspect, CLPS is failing NASA’s future goals to innovate and develop aerospace systems.

The potential consequences? If NASA pushes for more innovative missions (beyond the Moon), a CLPS-like program may struggle. Investors, burned by commercial lunar failures, could hesitate to fund future space ventures, and NASA may face challenges in maintaining in-house knowledge. With engineers outsourced to startups, NASA would either need to increase its budget to hire them back or cut other programs.

Investors should ensure that the companies they back are diversifying their customer base beyond NASA. Many have pivoted to the defense sector, where the DoD’s larger budget supports multiple companies, but even there, the future is uncertain, especially with SpaceX consolidating many capabilities. International markets are also becoming less viable due to political concerns. The hope is that a breakthrough commercial use for the Moon will spark a truly independent space economy, or there will be a clear, long term government presence. However, with Mars still the alternative target that could trump the Moon, that commitment doesn’t seem forthcoming.

The CLPS program has saved NASA from funding key costs of lunar logistics, but it has unfortunately created a single-customer ‘lunar economy’. It has not addressed NASA’isms that caused its programs to be expensive. Getting there was still expensive, and depended on more money than NASA provided, financed by VCs and other investors. The US space agency is not culturally learning how to be agile, lean and open to risk (which whether that is good or bad, is a philosophical consideration that deserves its own chapter, or even a whole book). For actual results, startups still have tons of failed missions. Investors should be cautious. But NASA doesn’t care, because in the end, it’s still relatively cheaper than funding their own mission, and their PR doesn’t get hurt. If Company A fails, they’re the ones that wasted tax-payer funds, not NASA. But over the long-term, this CLPS program is more a ‘who will survive to be the next government subcontractor competition’. Not a commercial venture.

II. Quote of the Week

“Do you think cutting opportunities like this could hurt the innovators in the industrial base?”

US Senator Kevin Cramer, asking Dept. of the Air Force nominee Troy Meink about the Air Force’s consideration to cancel purchases from various contractors to go all in on SpaceX Starshield system.

III. Immediate Awareness

1 SpaceX is urging the FCC to approve 30,000 additional Starlink satellites and upgrades for gigabit-speed internet while defending the project against critics who question its capabilities and regulatory compliance.

2 After a short 7 year development timeline, Isar Aerospace's first Spectrum rocket launch failed after about 30 seconds of flight, when it lost attitude control, demonstrating again the difficulties to build reliable rockets, though they managed to achieve immense progress in such short time.

3 The European Union is heavily investing in next-generation space electronics and critical technologies through its Horizon Europe program, focusing on strategic autonomy and innovative space systems in light of the Trump administration's continuously revealed disdain for Europe and allied cooperation.

4 Geopolitical shifts are driving government interest in Telesat's Lightspeed low Earth orbit satellite plans, validating its move beyond geostationary satellites as Starlink erodes its legacy broadband business.

5 The GAO rejected Kayhan Space's protest over a contract awarded to Slingshot Aerospace for the TraCSS space traffic coordination system, finding no grounds to sustain the claims of evaluation issues and pricing concerns, clearing the path for Slingshot to capture a significant SSA market.

6 Sateliot has successfully closed an approximately $75 million Series B funding round, with approximately $11 million from Hyperion Fund, to advance its satellite constellation and global connectivity services.

7 The ESA has issued call for proposals for its European Launcher Challenge to support launch vehicle development, offering up to $180 million per company, for up to 10 companies, and with a focus on small launch vehicles and potentially an Ariane 6 successor.

8 The European Space Agency has awarded a $3.3 million contract to a Spaceo-led consortium to test an inflatable drag sail system designed to deorbit small satellites by 2028, a system that if proven, could provide an excellent, low cost way to minimize space pollution.