This is probably why Blue Origin continues to protest NASA’s lunar lander award

Blue Origin founder Jeff Bezos announces the company's partnership with Lockheed Martin, Northrop Grumman and Draper to develop a human landing system in 2019.
enlarge / Blue Origin founder Jeff Bezos announces the company’s partnership with Lockheed Martin, Northrop Grumman and Draper to develop a human landing system in 2019.

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On Wednesday, the US Government Accountability Office released its full but redacted decision that ruled in favor of NASA’s selection of a Human Landing System contractor. The document (see PDF) makes it clear that SpaceX offered NASA the most technically appropriate, well-managed, and cheapest option.

In addition, the decision paper says NASA was perfectly justified in selecting a single winner for the lunar lander bid because Congress appropriated only about a quarter of the funds sought by the space agency. NASA, the document states, “expressly advised all bidders that the number of prizes will depend on available funding and that the agency may make multiple contract awards, a single award, or no award at all.”

As it has done several times since then NASA original decision to select SpaceX in April, Blue Origin greeted the GAO’s full decision with a spirited response. “We stand by our assessment that SpaceX received preferential treatment,” the statement says:, partially.

Blue Origin is clearly not giving up on the Human Landing System contract, nor is it shy about pushing forward with NASA and its choice of SpaceX to build the lander, even if it now seems like a lost hope. NASA made its decision in April. And now the GAO investigated the matter and found that NASA’s decision was good and justified.

So what the hell are Blue Origin and its founder, Jeff Bezos, up to? Why does his company continue to look like a bad loser in the industry and continue to offend a key customer at NASA? I have a theory.

In 2004, a company called Kistler Aerospace won a $227 million contract from NASA to complete development of its K-1 rocket and facilitate the delivery of supplies to the International Space Station. The agency justified the contract on the basis that no other US company had a launch vehicle that was nearing completion. At the time, Kistler claimed about 75 percent of the K-1 missile’s design was complete. The company had invested approximately $600 million over the past ten years to reach this advanced stage of development.

SpaceX CEO Elon Musk greeted this announcement with fury. Although SpaceX was only two years old and wouldn’t make its first Falcon 1 launch attempt for another two years, Musk believed NASA awarded the contract to Kistler because of favoritism. (The company’s CEO was George Mueller, an Apollo program leader and longtime NASA insider). Musk thought that SpaceX should have been able to compete for the contract.

“A lot of people have told me not to protest,” Musk told me before the book Liftoff, about the origins of SpaceX. “You have a 90 percent chance of losing. You are going to make a potential customer angry. I’m like, looks like ‘right’ is on our side here. Seems like this should go for competition. And if we don’t fight this, I think we’re doomed, or our chances of success will be drastically reduced. NASA as one of the largest space launch customers would be cut off from us. I had to protest.”

He did and in the end SpaceX won. After NASA learned that the GAO would rule in favor of SpaceX, NASA withdrew the award to Kistler and opened a new process known as Commercial Orbital Transportation Services, or COTS. SpaceX won one of these awards in 2006, and it helped the company grow quickly and also provided much-needed funding as SpaceX went through its Falcon 1 teething troubles. COTS led to operational contracts to bring cargo and crew to the space station. These contracts have been essential to SpaceX’s financial success.

Jeff Bezos knows his space history. And he watches with envy how SpaceX has been able to use federal contracts for rapid growth and hardware development programs.

So it seems likely to me that Bezos views the Human Landing System contract as COTS for Blue Origin. If the company could win this award, it would have a glide path toward future NASA contracts and the funding that follows.

The problem for Bezos is that the US aerospace industry is very different today than it was in 2004. SpaceX and a host of other new space companies have stepped in and NASA is no longer desperate for space service providers. In addition, NASA did have a competition for services with the lunar lander. Only there was only money for one provider. The decision of the GAO reinforces this conclusion.

But perhaps the biggest problem with this COTS moment from Blue Origin is this: SpaceX is still SpaceX, still the upstart, and still at it all these years later.

That means Blue Origin is not the upstart. Rather, it fits more comfortably into the Kistler role — a company that has spent large amounts of money for over a decade to build an orbital rocket that will stay a few years away from the launch pad.

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