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GAO denies Blue Origin’s protest of NASA’s lunar lander contract award to SpaceX

·8 min read
Blue Origin landers
An artist’s conception shows the human landing system that was being developed by Blue Origin and its industry partners in the foreground, and a cargo lander in the background. (Blue Origin Illustration)

The Government Accountability Office today turned back protests from Jeff Bezos’ Blue Origin space venture and Alabama-based Dynetics, ruling that NASA was within its rights to award a single $2.9 billion contract to SpaceX to build the first lunar lander to carry astronauts to the moon since the Apollo era.

Industry teams led by Blue Origin and Dynetics had put in rival bids for NASA’s lunar lander business, and filed protests with the GAO when the space agency made the single-source award in April. The GAO had 100 days to decide whether the award should be upheld or overturned. In the meantime, NASA and SpaceX suspended work on the contract.

The bid protests raised several objections to NASA’s award — including the fact that NASA made only one award.

NASA originally had hoped to provide funding to two of the three teams to continue work on their human landing systems, which would have given planners a backup option for a mission that’s scheduled for as soon as 2024. Such a lunar landing would serve as a historic milestone for NASA’s Artemis moon exploration program.

Blue Origin and its industry partners — Lockheed Martin, Northrop Grumman and Draper — proposed a beefed-up version of Apollo’s lunar lander, with a descent element, ascent element and transfer element. Dynetics offered up a low-slung integrated design that would land on the surface and take off again. SpaceX said it would build a customized version of its Starship super-rocket, which is currently undergoing development and testing in Texas.

The price tag for the Blue Origin team’s proposal was nearly $6 billion, or twice as high as SpaceX’s bid. Dynetics’ bid was even higher, in the range of $9 billion.

In the course of making its selection, NASA determined that SpaceX’s proposal had the highest rating on technical grounds. More importantly, agency officials said they could afford to make only one award, due to congressional budget limits.

Blue Origin and Dynetics said more than one award should have been made, in the interest of promoting competition and technical redundancy, but the GAO disagreed. Kenneth Patton, the GAO’s managing associate general counsel for procurement law, said the watchdog agency “concluded that NASA did not violate procurement law or regulation when it decided to make only one award.”

He pointed out that NASA said from the very beginning that the number of awards given out would be dependent on funding, and that it was within its rights to make a single award — or even no award.

Blue Origin and its teammates said NASA’s assessment also incorrectly downplayed the technical strengths of their proposal. But in a GAO statement, Patton said “the evaluation of all three proposals was reasonable, and consistent with applicable procurement law, regulation and the announcement’s terms.”

Yet another objection had focused on the fact that NASA negotiated the terms of the contract with SpaceX to fit the payment schedule to its budgetary expectations, after the proposals were submitted but before NASA announced its choice.

In their protests, Blue Origin and Dynetics said it was unfair for NASA to discuss terms with SpaceX without giving them the same opportunity. “That was a mistake,” Bezos told NASA Administrator Bill Nelson in an open letter released this week.

Patton said the GAO “agreed with the protesters that in one limited instance NASA waived a requirement of the announcement for SpaceX.”

“Despite this finding, the decision also concludes that the protesters could not establish any reasonable possibility of competitive prejudice arising from this limited discrepancy in the evaluation,” Patton wrote.

He said the full text of the decision was being held back from publication “because the decision may contain proprietary and source selection sensitive information.” Attorneys for the various parties will review the decision to identify information that shouldn’t be released, and then a public version of the decision will be posted to the GAO website.

In his letter to Nelson, Bezos talked up the value of financial competition and technical redundancy in the procurement of commercial lunar landing services — factors that have come up in congressional discussions as well. Some members of Congress — including Sen. Maria Cantwell, D-Wash. — have talked about adding billions of dollars to NASA’s budget to ensure a second commercial lunar landing system gets built, but it’s not clear whether that idea will take hold.

This week, Bezos offered to cover an additional $2 billion of the development costs for the Blue Origin team’s landing system — but that offer played no part in the GAO”s ruling, and has drawn no public response from NASA.

In an effort to address concerns about competition, NASA is setting up some new solicitations for lunar landing services that would follow up on the first crewed mission. Bezos, however, said those solicitations were “just optical substitutes for the real competition that a second, simultaneous dissimilar lander development will provide.”

In a series of emailed statements, Blue Origin said today that the $2 billion offer still stands and is not impacted by today’s ruling. Space Policy Online’s Marcia Smith quoted an unnamed company spokesperson as saying that Blue Origin has asked NASA to extend its base-period contract to Nov. 1, and is extending the $2 billion offer for the same period.

Blue Origin also said it would look to Congress for further action:

“We stand firm in our belief that there were fundamental issues with NASA’s decision, but the GAO wasn’t able to address them due to their limited jurisdiction. We’ll continue to advocate for two immediate providers as we believe it is the right solution. We’ve been encouraged by actions in Congress to add a second provider and appropriate additional resources to NASA’s pursuit to return Americans to the moon. We’re also very encouraged by Administrator Nelson’s comments over the past week that reaffirm NASA’s original intent to provide simultaneous competition. The Human Landing System program needs to have competition now instead of later – that’s the best solution for NASA and the best solution for our country.”

Update for 3:30 p.m. PT July 30: NASA says the decision opens the way for establishing a timeline for the Artemis program’s first crewed lunar landing. Here’s the full statement:

“NASA was notified Friday, July 30, that the U.S. Government Accountability Office has denied the protests filed by Blue Origin Federation and Dynetics and has upheld the agency’s source selection of SpaceX to continue the development of its human landing system. The decision enables NASA to award the contract that will ultimately result in the first crewed demonstration landing on the surface of the moon under NASA’s Artemis plan. Importantly, the GAO’s decision will allow NASA and SpaceX to establish a timeline for the first crewed landing on the moon in more than 50 years.

“NASA recognizes that sending American astronauts back to the moon for the first time since the Apollo program and establishing a long-term presence on the moon is a priority for the Biden administration and is imperative for maintaining American leadership in space. In the face of challenges during the last year, NASA and its partners have made significant achievements to advance Artemis, including a successful hot fire test for the Space Launch System rocket. An uncrewed flight of Artemis I is on track for this year and a crewed Artemis II mission is planned for 2023.

“NASA is moving forward with urgency, but astronaut safety is the priority and the agency will not sacrifice the safety of the crew in the steadfast pursuit of the goal to establish a long-term presence on the moon.

“As soon as possible, NASA will provide an update on the way ahead for Artemis, the human landing system, and humanity’s return to the moon. We will continue to work with the Biden administration and Congress to ensure funding for a robust and sustainable approach for the nation’s return to the moon in a collaborative effort with U.S. commercial partners.”

Dynetics issued a statement saying that it respected the GAO’s decision and that it’s continuing work on its lunar landing system:

“Dynetics, a wholly owned subsidiary of Leidos, is appreciative of the GAO’s review of NASA’s Human Landing System Option A decision and while disappointed, we respect the GAO’s determination announced today. Our focus for the HLS program from the beginning has been the development of a sustainable capability that enables a long-term lunar presence and helps fuel a future cislunar economy. To that end, we have continued to evolve our HLS design with a focus on sustainability.

“We are excited about the opportunity presented by NASA’s HLS Next-STEP Appendix N competition that provides funding for continued design and risk reduction activities for a sustainable lander. We also plan to compete for NASA’s announced Lunar Exploration Transportation Services opportunity. We believe healthy competition is necessary to maintain the industrial base required to achieve the important strategic goals of space exploration and national security. We will continue to pursue these opportunities with a team that helps strengthen the broader industrial base that includes international partnerships.

“Again, we appreciate the GAO’s review of the decision and we look forward to working with NASA on the future HLS opportunities.”

We’ve also reached out to SpaceX for comment, and will update this report with any reply we can pass along.

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