Bezos' Blue Origin protests NASA awarding astronaut lunar lander contract to Musk's SpaceX

Jeff Bezos and Elon Musk

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Jeff Bezos' Blue Origin filed a protest with the Government Accountability Office against NASA on Monday, challenging the space agency's award of a nearly $3 billion moon lander contract to Elon Musk's SpaceX earlier this month.

SpaceX, in a competition against Blue Origin and Leidos' subsidiary Dynetics, was awarded $2.89 billion for NASA's Human Landing System program. The HLS program is focused on building a lunar lander that can carry astronauts to the moon's surface under NASA's Artemis missions. For HLS, SpaceX bid a variation of its Starship rocket, prototypes of which the company has been testing at its facility in Texas.

NASA was previously expected to choose two of the three teams to competitively build lunar landers, making the sole selection of SpaceX a surprise given the agency's prior goals for the program to continue to be a competition.

Blue Origin decried the award as "flawed" in a statement to CNBC, saying that NASA "moved the goalposts at the last minute."

"In NASA's own words, it has made a 'high risk' selection. Their decision eliminates opportunities for competition, significantly narrows the supply base, and not only delays, but also endangers America's return to the Moon. Because of that, we've filed a protest with the GAO," Blue Origin said.

Blue Origin revealed that NASA evaluated the company's HLS proposal to cost $5.99 billion, or roughly twice that of SpaceX. The company argued in its protest filing that NASA's cost for funding both proposals would have been under $9 billion – or near how much the agency spent for SpaceX and Boeing to develop competing astronaut capsules under the Commercial Crew program.

"In failing to maintain two sources ... NASA's selection decision creates a number of issues for the HLS program and puts all of NASA's eggs in one basket," Blue Origin wrote in the protest.

The New York Times first reported Blue Origin's GAO protest.

Blue Origin's protest

Blue Origin

Blue Origin based its protest around five objections.

First, Bezos' company said NASA did not give SpaceX's competitors an opportunity to "meaningfully compete" after "the agency's requirements changed due to its undisclosed, perceived shortfall of funding" for the HLS program.

Second and third, Blue Origin said that NASA's acquisition was flawed under the agency's acquisition rules and its evaluation of the company's proposal "unreasonable." Fourth, the company asserted that NASA "improperly and disparately" evaluated SpaceX's proposal. And finally, Blue Origin said that NASA's evaluation of the proposals changed the weight it gave to key criteria, making price "the most important factor because of perceived funding limitations."

The company highlighted work done to develop its lunar lander, including an undisclosed amount of its own investment into the BE-7 rocket engine that it planned to use for the spacecraft.

"Blue Origin's substantial commercial investment in the BE-7 engine program is direct evidence of its corporate commitment in lunar exploration," the company wrote in the GAO protest.

NASA's selection process

Starship prototype rocket SN10 stands on the launchpad at the company's facility in Boca Chica, Texas.

SpaceX

The space agency announced the SpaceX contract on April 16, with a source selection document written by human spaceflight director Kathy Lueders outlining NASA's reasons for its decision.

NASA's based its selection on three primary factors: Technical ability, price, and then management rating. SpaceX and Blue Origin both received "acceptable" technical ratings, with SpaceX's price the lowest "by a wide margin" and its management rating was "outstanding" – while Blue Origin's management was rated as "very good," the same as Dynetics.

Notably, NASA's selection committee said it found "two instances of proposed advance payments within Blue Origin's proposal."

"I concur with the ... assessment that these kickoff meeting-related payments are counter to the solicitation's instructions and render Blue Origin's proposal ineligible for award," Lueders wrote.

NASA requested $3.4 billion for the HLS program in fiscal year 2021, but Congress approved only $850 million. In light of that lower-than-expected funding, Lueders acknowledged that picking only one company's proposal for the HLS program was "not NASA's optimal outcome" but within the agency's acquisition rules.

Last week, Musk hailed the NASA selection as a "great honor" and said he thinks the agency's goal of landing astronauts on the moon by 2024 is "actually doable."

"It's been now almost half a century since humans were last on the moon. That's too long, we need to get back there and have a permanent base on the moon — again, like a big permanently occupied base on the moon," Musk said.

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