Why Blue Origin is Challenging NASA's SpaceX Contract

Elon Musk and Jeff Bezos are the world’s two richest men. They are also rivals who have pretty much had a fair, subtle battle going on for a while now. However, while they never exactly admitted to dueling or having companies in the same space, their underhanded battle has found some room to breathe in the space industry.

Why Blue Origin is Challenging NASA's SpaceX Contract

Musk and Bezos run two of the largest private aerospace companies in the world - SpaceX and Blue Origin, respectively. Both companies might have different stated objectives, but they’ve managed to compete for some similar things over the years. Now, their competition appears to have come full circle as Bezos and Blue Origin are taking SpaceX to the task.

The Background: NASA’s Lunar Lander Contract

The cause of this challenge is a contract from NASA that has gotten the space industry on edge for a while now. As part of its mission to expand its presence in space, NASA opened the floor for private aerospace companies to bid on a contract that would see them develop its lunar lander system.

Although the contract’s sum wasn’t stated, everyone knew it would be a huge one. Even without the monetary benefit, the winner of the contract would get a significant amount of clout - as well as the opportunity to get even more contracts from NAS going forward. It was a win-win.

However, while NASA was looking to hopefully work with more than one company, the agency eventually picked SpaceX over the other firms that submitted contracts. The reason, according to reports, was the financial benefit that SpaceX offered. The California-based company had the cheapest bid, and it is also more financially flexible and capable of making good on the contract.

Other companies like Boeing and Blue Origin had partnered with third-party contractors and firms, making their bids more expensive. Eventually, NASA settled for SpaceX in a contract that is rumored to have been worth $2.9 billion.

Blue Origin Asks “Why?”

Immediately the news of the SpaceX win came out, and many were ecstatic. The news was a milestone on several levels - it marked what would solidify SpaceX as a bonafide partner for NASA. It also helped establish the company’s leadership in the private spaceflight industry.

The milestone also marked that NASA is indeed serious about its mission to move to the moon - and perhaps even Mars in the nearest future. With companies like SpaceX ready to help keep things steady, the agency won’t lack effective partners.

However, Blue Origin wasn’t quite happy with the way things stood. The company immediately fired back, filing a 50-page protest with the Federal Government Accountability Office to challenge the NASA-SpaceX contract. A spokeswoman for NASA confirmed the filing with news sources, explaining that they had indeed gotten the query.

In an interview with The New York Times, Bob Smith, Blue Origin’s chief executive, said that NASA’s decision was driven by a flawed evaluation of the bids submitted. He added that the agency had misjudged Blue Origin’s proposal and even miscalculated SpaceX’s possible challenges. He also pointed out that NASA seemed to have been more concerned with the overall cost than it should have been.

“It’s really atypical for NASA to make these kinds of errors. They’re generally quite good at acquisition, especially its flagship missions like returning America to the surface of the moon. We felt that these errors needed to be addressed and remedied.”

According to Smith, NASA should have stuck with the plan to hand the contract to two companies, other than one.

In its protest, Blue Origin claimed that NASA hadn’t allowed the competitors “to meaningfully compete for an award when the Agency’s requirements changed due to its undisclosed, perceived shortfall of funding for the multi-year program lifecycle.” The company also alleged that NASA had changed the evaluation factors’ weights to prioritize price due to its budget constraints.

Let Go or Keep Fighting?

The question now is whether Blue Origin’s complaints will amount to much at the end of the day. In truth, it’s difficult to say.

While many might think that Blue Origin should let it go, Dynetics - another company that submitted a contract - has also filed a complaint appealing the decision to pick SpaceX. At the same time, NASA seems dead set on working with SpaceX. If Blue Origin and Dynetics can’t find a way to make their proposals less expensive, it’s tough to see how NASA will award them the contract. The agency can’t make money out of thin air.

Musk has been taking a victory lap on his own. The billionaire poked fun at Blue Origin in a tweet, claiming that the company couldn’t get rockets up into orbit just yet.

The protests have now set off a 100-day review period, during which the Accountability Office will weigh whether NASA’s contract was deserved and should push forward or not. If history is any guide, there’s little that Blue Origin or Dynetics can do to stop this contract from moving forward. However, with these billionaires in tow, anything could really happen.

 


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