Blue Origin’s Attempt to Block SpaceX’s NASA Contract is Officially Dead

It has been a long couple of months of fighting and subtle shade. However, things appear to be cooling down as Blue Origin and SpaceX’s conflict over the NASA moon lander program has ended.

Blue Origin’s Attempt to Block SpaceX’s NASA Contract is Officially Dead

As many expected, SpaceX was the party to come out of this ordeal victorious. Jeff Bezos and Blue Origin will now have to settle for yet another loss - something that is becoming all too familiar.

According to reports from last week, the Government Accountability Office (GAO) confirmed that NASA received the green light to offer its lunar lander program to SpaceX - Elon musk’s space company. The decision came after Blue Origin and Dynetica had protested SpaceX’s win and prompted an investigation into the process that led to its victory.

SpaceX Draws First Blood

The background to the investigation runs as far back as earlier this year. NASA has been working significantly to send astronauts to the moon and extend its presence on the celestial body. It eventually sent out a contract seeking partners for its lunar lander system.

SpaceX won the contract, offering a bid that was billions of dollars cheaper than Blue Origin and Dynetics - its main rivals. The other companies had been working as teams, partnering with other publicly traded firms. With these companies focusing on profits, they had more of a reason to drive the prices of their bids up. On the other hand, SpaceX is operating alone, and its progress with space equipment allows it to enjoy more economies of scale.

According to reports, SpaceX’s contract was valued at $2.9 billion, while Blue Origin offered a $5.9 billion contract. Dynetics’ offer was even higher than Blue Origin’s, although it wasn’t disclosed.

With such a price drop, NASA was always going to pick SpaceX. The space agency had been struggling with budget approvals for a while now, getting just about $750 million of the $3 billion it requested for the lunar lander program from Congress. It was a no-brainer for the agency to stick with the company that sent the lowest bid.

Blue Origin and Dynetics Go on the Offensive

Not satisfied with the process, Dynetics and Blue Origin immediately filed a report with the GAO, explaining that NASA had changed its selection criteria to favor SpaceX. In their complaint, the two companies explained that NASA had allowed SpaceX to change its contract terms in order to streamline its numbers - a courtesy that the agency never extended to them.

Even with the complaint filed, there was skepticism about whether this gambit would succeed. The fact remains that NASA has a limited budget, and nothing can change that. Except Blue Origin and Dynetics would be willing to cut their budgets, not much could be done.

In the beginning, it looked like the complaint could actually work. NASA’s contract award to SpaceX was suspended, although industry experts primarily believed that this was a normal thing for the agency. The GAO would need time to examine whether there were any irregularities in the award process, which would take months.

Not Much Has Changed

Sadly, nothing changed. As last week’s reports confirmed, the contract will stand - primarily for financial reasons. The GAO explained that while NASA claimed that it would give out contracts to multiple parties, it didn't have enough money to make good on that promise. The GAO also claimed that NASA had fairly and reasonably evaluated all companies and their bids. So, the contract will stand.

In its statement, the GAO pointed out that NASA had not violated procurement laws when it decided to award the lunar lander contract to just one company. It explained that the contract was contingent on NASA’s available funding, which meant that the agency could narrow the field to just one company if it felt like it.

While the GAO agreed that NASA had waived a “mandatory solicitation requirement” for SpaceX, it also pointed out that Blue Origin and Dynetics couldn’t establish a reasonable possibility of competitive prejudice from this discrepancy.

A spokesperson for Blue Origin, Linda Mills, explained to reporters that they hope NASA will reconsider its options.

"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 continue to advocate for two immediate providers as we believe it is the right solution," Mills said in her statement.

It is understandable that Blue Origin would want to get NASA to reconsider things. The company is just coming off an impressive high, with Bezos and several people taking their first human flight to space. Momentum from that trip will essentially fuel Blue Origin to try other things, and the company isn't giving up on the lunar lander project just yet.


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