PPE and the Cost of Forgetting
How NASA lost the plot on public-private partnerships—and may leave its billion-dollar spacecraft with nowhere to go.
Before “PPE” became pandemic shorthand for masks and gloves, it stood for something else at NASA: the Power and Propulsion Element. A core component of the now-imperiled Lunar Gateway, PPE was supposed to embody the best of what NASA had learned from its foray into commercial space partnerships.
Instead, it has become a cautionary tale.
And who better to tell that story than Phil McAlister—the former Futron analyst turned watchdog inside NASA’s Office of Program Analysis and Evaluation, and later head of the agency’s Commercial Space Division. McAlister wasn’t just present for the COTS revolution—he helped shape it. He spent years trying to institutionalize its lessons: milestone-based payments, fixed-price contracts, true commercial ownership, and shared risk. But the culture, he says, refused to change. The playbook was picked apart, misunderstood, and ultimately discarded.
He’s laid it all out in a recent LinkedIn post—bluntly titled “NASA is Killing the Goose That Laid the Golden Egg.” It’s not just catharsis: McAlister offers a clear breakdown of what made COTS work, why PPE failed to follow the model, and how NASA’s half-measures hollowed out the very commercial partnerships it once championed. He even includes the internal comparison table he used for years to try to educate his colleagues.
Nowhere is that clearer than in the tortured saga of PPE.
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What COTS Got Right
Back in 2006, NASA Administrator Mike Griffin called the Commercial Orbital Transportation Services (COTS) initiative a gamble. “If it doesn’t work,” he told me at the time, “I’ve made the wrong bet… with a good amount of money that we could have used for other purposes.” The $500 million wager was split between two unlikely partners: SpaceX, an internet entrepreneur’s vertically integrated rocket shop, and Rocketplane Kistler (RpK), a post-bankruptcy throwback betting on a reusable booster it had never flown.
Within a year, RpK failed to raise private funding and missed key milestones. NASA pulled the plug. The agency redirected its funds through a new competition, bringing Orbital ATK and its Cygnus cargo vehicle into the fold. SpaceX, for its part, hit its milestones and went on to transform space access with Falcon and Dragon.
NASA took risks. But it also had discipline. That’s what real commercial stewardship looks like.
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What PPE Got Wrong
Fast forward to 2017. The Power and Propulsion Element—born from the ashes of the Asteroid Redirect Mission—was being pitched as a “commercial” contract. McAlister, then still at NASA, was never consulted. When he reviewed the strategy, he was alarmed. The mission had no competition, no commercial market, and requirements still in flux. “This will make a fixed-price contract essentially a cost-plus contract,” he warned in a white paper. He was ignored.
NASA awarded Maxar a $375 million firm fixed-price contract in 2019. Four years later, the Government Accountability Office reported what McAlister had predicted: the contract had ballooned by 95%, saddled with over 700 new requirements, with more cost growth expected.
PPE wasn’t an isolated misstep—it was a symptom. Across its portfolio, NASA began applying fixed-price contracts to fragile, poorly scoped missions while retaining full control over design and execution. The result? A Frankenstein model that shifted risk to industry without relinquishing government micromanagement. Companies bore the cost, while NASA retained the steering wheel.
Even the Commercial Lunar Payload Services (CLPS) program, billed as the next great commercial leap, has stumbled under similar contradictions. Risk was dumped on small vendors, oversight crept back in, and one company went bankrupt. Several others remain stuck in limbo.
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A Hybrid Model with No Exit
McAlister’s frustration is clear: NASA wants the benefits of commercial innovation—speed, flexibility, cost savings—without surrendering control. But the agency’s institutional reflexes remain steeped in Apollo-era command-and-control. In trying to split the difference, it created a system that’s too commercial to be resilient, too bureaucratic to adapt, and too politicized to survive a shift in White House priorities.
Which brings us to today.
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A Billion-Dollar Orphan?
The FY26 budget proposal from the Trump administration calls for cancelingthe Lunar Gateway, Space Launch System (SLS), and Orion programs after Artemis III. The White House proposes reallocating funds toward cheaper, commercial alternatives for lunar and Mars missions.
That would leave PPE—a billion-dollar spacecraft already deep in development—without a station to power, no astronauts to host, and no long-term mission to support. It’s not hyperbole. The PPE and HALO modules are scheduled to launch together on a SpaceX Falcon Heavy in late 2027. NASA estimates their combined cost to build, launch, and activate is $5.3 billion—and much of that has already been spent.
If Gateway is canceled, they will be marooned in lunar orbit, a costly monument to an abandoned architecture.
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Could Anyone Else Use Them?
Not likely. Commercial space station ventures like Voyager Technologies and Axiom are focused on low Earth orbit (LEO), not lunar space. They have no use for a power module like PPE or a compact crew habitat like HALO—especially not 400,000 kilometers from Earth. The orbit mismatch alone makes them non-starters. These modules were built for NASA specs, NASA timelines, and NASA ambitions—not for resale.
If launched without the rest of Gateway, PPE and HALO could become autonomous technology demonstrators, testbeds for electric propulsion or proximity navigation. At best, they might one day serve as targets for rendezvous practice or as the core of a future robotic servicing node. But that would be repurposing out of necessity, not design.
As someone put it: cislunar target practice.
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Fallout Across the Atlantic
The damage isn’t limited to American programs. The European Space Agency (ESA), which has contributed Orion service modules and key Gateway components, is now reassessing its entire strategy. ESA Director General Josef Aschbacher responded quickly to the proposed budget cuts, initiating a review with member states. Under current agreements, ESA was set to barter those contributions for three European astronaut seats aboard Artemis missions.
If Orion and Gateway are canceled, those Moon tickets may vanish.
Europe expected a ride to the Moon. It may get a lesson in American inconsistency instead.
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The Price of Forgetting
NASA once proved that it could take smart risks. COTS and Commercial Crew Program didn’t just change how spacecraft were built—they helped birth a thriving commercial ecosystem. But instead of building on that legacy, the agency misread the lesson. It adopted only the language of commercial innovation while clinging to the habits that suffocate it.
Now, as McAlister’s warnings come full circle and the PPE floats toward an uncertain fate, we’re left with a hard truth:
NASA didn’t just forget what made its greatest gamble succeed.
It reverse-engineered failure from its own success.
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The old deal of Orion SMs and Gateway elements for Surface rides may go away.
But cheaper direct access to the Moon will allow Europeans to build useful surface
infrastructure for their part of the Lunar Village and give NASA a LOT more surface
visits it can share with Europe.
Brian, very much enjoyed. - Charles Miller