The tale is partly, not entirely false. + $1 million dollars was spent developing something that could be done by a pencil. Isn't that the crux of the tale?
Who paid for it is not the most salient feature of the tale is it? Even if the point of the tale is only to ridicule NASA (which it wasn't) I don't see the entirety of it being false.
What's additionally missing from this story was that while the Soviets were using a simple grease pencil to avoid the graphite flaking problem the US was using a mechanical pencil that cost NASA about $130 each. NASA developed the $130 mechanical pencil and had them manufactured by a Texas firm while the Soviets used an off the self grease pencil. When this was made public it created such a stink Fisher couldn't get NASA to cover his engineering costs. The Snopes story makes it sound like Fisher altruistically paid for the pens development but the truth is when he began development it was to compete with the expensive mechanical pencil. He fully intended NASA to reimburse him but after the mechanical pencil costs were made public Fisher couldn't get NASA to pay for the development costs. So while it is technically true NASA didn't develop the space pen the pens developer fully intended to have NASA pay for development costs, NASA intended to and probably would have had the story of the mechanical pencils not been made public. The Fisher side of the story posted on Snopes is factual but lies by omission. NASA didn't ASK Fisher to develop the pens but Fisher worked specifically for NASA on the project and did not work on the problem themselves because of this. The development costs were not charged to the Govt. because it was no longer possible to do so. Doing so was the original intent however. The Soviets must have liked the pen better than their grease pencils because they began using the Fisher pen right away but they were charged something like $6 each for them while NASA was charge $3.
John Thornton