What procurement method does SpaceX typically use, contrasting with NASA's extensive cost-plus agreements?

Fixed-price contracts, incentivizing internal cost control and vertical integration.

The financial structure surrounding procurement highlights a major divergence between the two organizations. NASA frequently utilizes cost-plus agreements when contracting for services and hardware. This structure is designed to mitigate risk for the contractors involved, often leading to higher overall program costs due to the overhead required for management and reporting layers necessary to oversee taxpayer funds. In contrast, SpaceX operates predominantly under fixed-price contracts for many of its services. This model places the onus of cost control directly on SpaceX, strongly incentivizing internal efficiency, robust vertical integration, and aggressive management of expenses to maximize profitability within the agreed-upon fixed cost.