White House scrutinizes SpaceX contracts amid ongoing Trump-Musk tensions, sources say

The White House earlier this month directed the Defense Department and NASA to gather details on billions of dollars in SpaceX contracts following the public blowout between President Donald Trump and billionaire Elon Musk, four people familiar with the order told Reuters.

Sparking an ongoing review, the administration ordered the agencies to scrutinize Musk’s contracts to ready possible retaliation against the businessman and his companies, these people said. As Reuters reported on Thursday, Pentagon officials are simultaneously considering whether to reduce the role that SpaceX, Musk’s space and satellite company, may win in an ambitious new US missile defense system.

Reuters couldn’t determine whether the White House intends to cancel any of the approximately $22 billion in federal contracts SpaceX now has. But the review shows the administration is following through on a threat by Trump during his spat with Musk last week to possibly terminate business and subsidies for Musk ventures. “We’ll take a look at everything,” the president said, speaking to reporters aboard Air Force One on June 6.

In an email to Reuters, a White House spokesperson didn’t answer questions about Musk's business, saying the “Trump administration is committed to a rigorous review process for all bids and contracts.” In a separate statement, a spokesperson at NASA said the agency “will continue to work with our industry partners to ensure the president’s objectives in space are met.”

Neither SpaceX nor officials at the Defense Department responded to requests for comment.

The people familiar with the order said the contract scrutiny is intended to give the administration the ability to move fast if Trump decides to act against Musk, who until recently was a senior advisor to the president and the head of the cost-cutting Department of Government Efficiency, or DOGE. The review is “for political ammunition,” one of the people said.

Whether the US government could legally, or practically, cancel existing contracts is unclear. But the possibility underscores concerns among governance experts that politics and personal pique could improperly influence matters affecting government coffers, national security and the public interest.

“There’s an irony here that Musk’s contracts could be under the same type of subjective political scrutiny that he and his DOGE team have put on thousands of other contracts,” said Scott Amey, a contracting expert and general counsel at the Project on Government Oversight, a watchdog group based in Washington. “Any decision shouldn’t be based on the egos of two men but on the best interests of the public and national security.”

Musk’s SpaceX in recent years has become a crucial partner of the US government in much of its aerospace and defense work – launching satellites and other space cargo and potentially managing a crucial element of the “Golden Dome” missile shield planned by Trump.

Although Musk in recent days has sought to walk back some of his critiques of the president – such as calling for Trump’s impeachment last week and linking him to a convicted sex offender – his outbursts nonetheless highlighted the government’s reliance on SpaceX.

Before reversing course, Musk threatened to decommission the company’s Dragon spacecraft. The spacecraft, as part of a roughly $5 billion contract with NASA, is the only US vessel currently capable of carrying astronauts to and from the International Space Station.

SpaceX is also building a network of hundreds of spy satellites under a classified contract with the National Reconnaissance Office, a US intelligence agency. The contract was a pivotal transaction for SpaceX, deepening its ties with US defense and intelligence services.