Jeff Bezos’s Blue Origin Wants NASA To Pay Its Legal Fees – And More

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The National Aeronautics and Space Administration's (NASA) decision to award Hawthorne, California-based aerospace launch services provider Space Exploration Technologies Corp (SpaceX) with a multi-billion dollar contract for the agency Moon landing program faced opposition from Kent, Washington equipment manufacturer Blue Origin Federation, LLC, founded by retail billionaire Jeff Bezos in the year 2000. NASA made the award in April this year, following which Blue Origin challenged the agency's decision, accusing it of violating the contract solicitation rules.

Following a complaint with the United States Government Accountability Office (GAO), Blue Origin also sued NASA in the U.S. Court of Federal Claims, and the details of the company's lawsuit have become available after a redacted copy was released by the court yesterday. This copy describes the nature of Blue's grievances, and it also outlines the reasons it believes underlie NASA's alleged impartiality in the matter.

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The primary concern highlighted by Blue Origin in its lawsuit revolves around pre-flight reviews of the rockets and the spacecraft involved in NASA's Moon landing missions. The landing vehicle for them is officially dubbed the Human Landing System (HLS), and these reviews are called flight readiness reviews (FRRs).

SpaceX won the $2.9 billion HLS contract for a variant of the upper stage of its Starship launch vehicle system, which is currently under development in Boca Chica, Texas. Dubbed as the lunar Starship, the spacecraft will require 16 launches for its journey to the Moon. 14 of these will be for what could be an orbiting propellant depot, one for the depot itself and one for the lunar Starship. Interestingly, the lawsuit is also the first time we see an official document mention the term 'propellant depot' in relation to the HLS program.

In its lawsuit, Blue Origin alleges that while NASA's contract requirements would need an FRR for each of the 16 launches, SpaceX's initial proposal outlined only a single review - for the spacecraft itself. The company further alleges that the single review disqualified SpaceX's proposal for the HLS contract and that NASA acted inappropriately when it allowed SpaceX to modify its proposal and payment milestones.

SpaceX's latest render for its lunar lander reveals an upgraded design with solar panels, which played a crucial part in its selection by NASA for the Artemis program. Image: SpaceX

Adding further controversy, Blue Origin states in the lawsuit that:

NASA's new-for-litigation position was based on requirements that NASA did not include in the Solicitation. For example, the Solitiction did not say that only one FRR is required for each launch vehicle type, regardless of how many launches one would use, and irrespective of the maturity of the launch vehicle and any propellant depots needed[EMPHASIS ADDED]. Nonetheless, NASA's new-for-litigation position was that it could remove the requirement for one FRR each launch, allow SpaceX to submit just three FRRs, and select SpaceX's launch vehicle that is not yet designed, let alone operation.

The "new-for-litigation" position referred to here is not for the legal case, but instead, it refers to Blue's complaint before the GAO. While the GAO had rejected the complaint, it did rule that the three FRRs were "insufficient" for SpaceX's launch operations, going on to add that NASA's waiver of the requirement did not harm Blue Origin since its proposal of an Integrated Lunar Vehicle (ILV), did not contravene any FRR requirements.

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Blue Origin's ILV is a three-part spacecraft that requires assembly in space after the ascent, descent and transfer elements have launched from Earth to compete with the lunar Starship on seemingly separate rockets.

Compared to the Starship tests in Boca Chica, Texas, which use SpaceX's new Raptor engines, the lunar Starship will use different engines and feature other changes over the regular Starship, such as fewer or no aerodynamic control surfaces thermal protection systems.

A render of the National Team's Integrated Landing Vehicle (ILV) in lunar orbit. The transfer, descent and ascent elements are visible from left to right. Image: Blue Origin

Blue Origin then states that NASA's decision to allow SpaceX to revise its proposal and adjust milestone payments went against the solicitation rules. Instead, the company believes that NASA should have deemed the Starship proposal as un-awardable due to the FRR violation.

According to the lawsuit:

In other words, SpaceX's initial proposal was unawardable, and the Agency used post-selection negotiations to allow SpaceX to make changes to render its proposal acceptable to the Agency. Had the Agency correctly assessed SpaceX's inital noncompliant proposal with a deficiency during the evaluation period, SpaceX's proposal could not have been selected for an award, pursuant to the Solicitatio's explicit instructions that proposals containing a deficiency are unawardable. The Agency engaged in post-selection negotiations in order to correct an evaluation error made during its initial evaluation and to proposal awardable. Therefore, the post-selection negotiations were part of the evaluation process. Exchanges where an offeror is allowed to revise price and other sections of its proposal discussions, particularly where these exchanges are part of the evaluation process. The Agency attempts to circumvent requirements in procurement statute and the Federal Acquisition Regulations ("FAR") regarding discussions, by calling them post-selection negotiations. The Agency actions here violate fundamental procurement principles regarding fairness.

SpaceX's position on the entire affair circulated in Capitol Hill earlier this week. Image: Michael Sheetz/Twitter

It also accuses NASA of knowing that SpaceX's FRR plans were inconsistent with the contract requirements before the proposal award.

It alleges that:

During the GAO protest, documents eventually produced by the Agency revealed that SpaceX's proposal did not offer one FRR for each launch as required by the Solicitation, and that NASA knew that such a proposal was not compliant. NASA internal documents stated specifically that SpaceX's proposal "is inconsistent with" and "not in accordance with" the requirement for the FRR milestone review.

Blue then states that had NASA informed it about purportedly waiving the FRR requirements, it would have revised its proposal to accommodate the agency's budgetary constraints. NASA had originally intended to make two lunar lander awards but ended up with one due to a lack of funds.

The company believes that "It would have been easy and in NASA's best interest to simply pick up the phone and call Blue Origin."

As a result, Blue Origin requests the court to stop NASA and SpaceX from commencing work on the HLS program, declare the contract award illegal, compel NASA to make a new award and make the space agency pay Blue Origin's legal fees and other costs.

The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
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