Cost-plus contracting remains the dominant form for NASA’s largest human-spaceflight and flagship science developments. Under those terms the government reimburses allowable costs and pays a fee. Primes include Boeing, Lockheed Martin, Northrop Grumman, and, on selected elements, other traditional aerospace firms. Fixed-price awards exist in commercial cargo and some crew work, but the agency’s highest-visibility vehicles have long sat on cost-plus or hybrid vehicles.

The NASA Office of Inspector General has treated overruns as a standing audit theme. Public reports on the Space Launch System, Orion, the James Webb Space Telescope, and related ground systems describe baselines that slipped, reserves that were consumed, and technical issues that converted into dollars. The inspector general has not alleged fraud in those core findings. The reports describe contract structure, NASA’s oversight of earned-value data, and the difficulty of holding a cost-plus prime to an original estimate once requirements and design freeze later than planned.

SLS and Orion illustrate the pattern. NASA awarded core stages and related work under cost-plus arrangements. OIG products over multiple years recorded cost growth measured in billions relative to earlier agency figures, delayed first flights, and dependence on a small set of industrial partners. Officials at NASA have publicly attributed growth to first-of-a-kind engineering, evolving safety requirements, and supply-chain disruption. The inspector general’s public summaries have emphasized that cost-plus vehicles give the contractor limited financial incentive to finish under the original estimate once costs are deemed allowable.

Webb followed a similar paper trail. Development began under cost-plus terms with Northrop Grumman as prime. Independent reviews and OIG work documented a program that exceeded its 2000s-era cost and schedule commitments by large multiples before launch in 2021. NASA leadership at the time described the telescope as a unique astrophysics mission whose technical risk could not be fully priced at award. Subsequent OIG language treated the episode as evidence that the agency’s processes for setting and defending a baseline were insufficient when the contractor’s fee was not tightly tied to an overrun cap.

Commercial Crew mixed models. SpaceX’s crew vehicle was largely fixed-price after NASA’s earlier investment in development. Boeing’s Starliner work retained more cost-plus characteristics on some elements and has been the subject of OIG and Government Accountability Office commentary on delays and additional NASA funding. NASA officials have said the mixed approach was intended to buy crew access while sharing development risk. Audits have recorded that Boeing’s schedule and cost experience did not match the more optimistic public timelines of the mid-2010s.

OIG methodology is public. Auditors sample invoices, compare contractor estimates at completion with NASA’s independent assessments, and test whether the agency challenged growth in a timely way. Recurring findings include optimistic contractor reporting, NASA concurrence that later proved wrong, and limited use of award-fee reductions when performance missed gates. The inspector general has recommended stronger independent cost estimates, more aggressive use of award-fee levers, and, in some reports, greater use of fixed-price or incentive structures where technical risk is judged to have declined.

NASA’s public position, as stated in responses appended to OIG reports and in congressional testimony, is that cost-plus remains appropriate for systems with high technical uncertainty and that the agency has tightened earned-value surveillance and independent reviews. The record shows NASA has not abandoned cost-plus for SLS Block upgrades, Orion production, or several science flagships still in formulation. Congress has continued to appropriate against those lines even after successive OIG warnings.

Procurement law does not forbid cost-plus. The Federal Acquisition Regulation authorizes it when the government cannot reasonably define a firm price. NASA’s justification, according to its own acquisition strategies, is that human-rating, deep-space environments, and one-of-a-kind instruments meet that test. Critics in GAO products and some congressional hearings have argued that after a decade of SLS and Orion development the remaining work looks more like production than invention, a characterization NASA has not fully accepted.

The industrial base is concentrated. A handful of primes hold the majority of NASA’s large development dollars. Revolving-door movement between those firms and NASA program offices is a matter of public ethics filings, not a finding of illegality in the overrun audits. OIG reports focus on contract type and oversight, not personnel.

Money follows the audits. Supplemental appropriations and reprogramming have covered SLS and Orion growth. Webb required a congressional rebaselining. Those facts appear in budget justifications and IG summaries. They do not, by themselves, prove that a different contract type would have produced a cheaper telescope or a flying SLS on the original date. They do show that NASA’s chosen vehicles left the government holding residual cost risk after award.

The inspector general’s most recent cycle of work continues to list major contracts among high-risk areas. NASA’s management responses typically concur in part, cite process improvements, and decline to convert flagship development to firm-fixed-price. That exchange is the public record: cost-plus primes, OIG overrun findings, agency rebuttals, and appropriations that keep the programs funded.