Trump administration weighed dropping SpaceX contracts after Musk feud, but found most too crucial: Report

Trump–Musk rift triggers White House review of SpaceX contracts

After the US President Donald Trump got into feud with Tech Billionaire Eon Musk the White House has started reviewing, according to a report by The Wall Street Journal.

The administration launched the review to “identify potential waste in agreements worth billions of dollars,” citing sources familiar with the process, the report mentioned.

Breaking up with Elon Musk is easier said than done for the US government. The Trump administration has begun reviewing SpaceX’s multibillion-dollar federal contracts to identify potential waste, following President Trump’s suggestion in early June that the government might sever ties with Musk’s businesses, sources told the Wall Street Journal.

Musk Trump feud 

In early June, tensions between Elon Musk and President Donald Trump escalated after Musk criticized Trump’s flagship tax and spending legislation on social media.

On June 5, Trump took to Truth Social, suggesting that cutting ties with Musk’s companies would be a cost-saving measure: “the easiest way to save federal dollars was to terminate the government contracts for Musk’s companies.”

Shortly after, on June 9, Josh Gruenbaum, Commissioner of the Federal Acquisition Service at the General Services Administration (GSA), contacted the Department of Defense requesting a detailed breakdown of SpaceX’s government contracts and other transaction agreements.

This request, sources said, was part of an internal review prompted by the White House.

Similar data was also requested from NASA and at least five other federal agencies. The documents, described as “scorecards,” outlined the value of each SpaceX contract and evaluated whether other vendors could potentially fulfill the same roles more efficiently.

However, after reviewing the submitted data, officials at both the Pentagon and NASA concluded that the majority of SpaceX’s contracts were too strategically important to be discontinued. While a few may remain under review, a widespread termination was deemed unfeasible.

This episode marks a notable shift in the relationship between Musk and Trump. Once a key figure in Trump’s government efficiency efforts, Musk’s public criticism of administration policies has led to a sharp deterioration in their alliance.

SpaceX

SpaceX President Gwynne Shotwell recently met with White House officials during the contract review, underscoring the gravity of the process. Details of their discussions remain confidential.

The review reaffirmed a long-standing reality: the U.S. has few alternatives to SpaceX for critical space capabilities.

SpaceX currently leads the commercial launch sector, with its reusable Falcon rockets serving as the backbone for government payload deployment. Its Crew Dragon capsule is now the only U.S. spacecraft certified to ferry astronauts to the International Space Station.

In recent months, SpaceX launched an upgraded GPS satellite for the US Space Force, and in April, the Pentagon awarded it 28 national-security missions valued at $5.9 billion - more than any other provider. NASA has also scheduled another crewed mission with SpaceX later this month.

However, this dependency has drawbacks. At the peak of his feud with Trump, Elon Musk even threatened to retire Crew Dragon before reversing course, raising concerns within NASA about overreliance on a single provider.

Efforts to reduce US dependence on SpaceX have highlighted the government’s reliance on the company's advanced technology and competitive pricing. Programs are being structured to boost competition, but private challengers continue to grapple with technical delays and the challenges of space-grade hardware development.

Meanwhile, SpaceX not only launches its own rockets but also carries payloads for rival firms - a point Shotwell emphasized at an investor event in November - citing the company’s track record of competitive pricing and reliable performance.