Can NASA Compete with SpaceX?

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That’s the question posed by the Orlando Sentinel’s Robert Block in an article comparing NASA with SpaceX, which is a private space transport company: 

Early this month, a private company called SpaceX launched an unmanned version of its Dragon capsule into orbit, took it for a few spins around Earth, and then brought it home with a splashdown in the Pacific Ocean. The total cost — including design, manufacture, testing and launch of the company’s Falcon 9 rocket and the capsule — was roughly $800 million.
 
In the world of government spaceflight, that’s almost a rounding error. And the ability of SpaceX to do so much with so little money is raising some serious questions about NASA.
Now compare with NASA:
Over the past six years, NASA has spent nearly $10 billion on the Ares I rocket and Orion capsule — its own version more or less of what SpaceX has launched — and came up with little more than cost overruns and technical woes. In October, Congress scrapped the Constellation moon program and ordered the agency to start over to design a rocket and capsule capable of taking humans to explore the solar system.
A Cato essay on cost overruns in government programs points out that NASA is one of the government’s worst offenders:
The National Aeronautics and Space Administration has long had major cost overrun problems, such as on its space station program. A GAO report in 2009 found that 10 of 13 major projects examined had substantial cost overruns or schedule delays. Alan Stern, a former NASA associate administrator, recently noted that “our space program is run inefficiently, and without sufficient regard to cost performance,” and further noted that costs overruns are a “cancer” on the agency. 
Perhaps it’s a little unfair to use the word “compete” since SpaceX is receiving federal funds from NASA. That said, it seems clear that allowing the private sector to play a greater role in space is ideal, especially given NASA’s history of fiscal mismanagement. Whereas private companies are responsible to shareholders, NASA is responsible to policymakers who are often more concerned about maintaining space-related jobs in their districts rather than getting the best bang for the taxpayer buck.