Blue Origin & Dynetics Protests Dismissed: SpaceX Lunar Lander Award Stands

NASA's Artemis Program and the SpaceX HLS Contract Dispute

Both Blue Origin and Dynetics continue to express dissatisfaction regarding NASA’s selection of SpaceX as the sole contractor for the Human Landing System (HLS) within the Artemis program. Their formal challenge to this decision has been dismissed, and the detailed reasoning behind the Government Accountability Office’s (GAO) rejection is now publicly accessible.

Initial Program Goals and Funding

As a reminder, in 2020, NASA initially chose three companies – SpaceX, Blue Origin, and Dynetics – to receive initial funding. This funding was intended to support the development and proposal of lunar landing systems capable of achieving a crewed lunar landing by 2024.

NASA indicated a preference for selecting two proposals for further development. However, when the contract was ultimately awarded, SpaceX was the only company to receive funding.

The Basis of the Protests

Dynetics and Blue Origin filed separate protests, yet their arguments were largely consistent. They raised three primary concerns:

• NASA should have awarded contracts to two companies, as initially suggested, to mitigate risk and foster competition.
• The award process should have been modified when NASA realized budgetary constraints would limit the number of awards.
• NASA’s evaluation of the proposals was conducted unfairly, demonstrating a preference for SpaceX and bias against the other contenders.

GAO's Rejection of the Protests

The GAO report comprehensively addresses and refutes each of these concerns.

Specifically, the GAO’s findings effectively invalidate Blue Origin’s subsequent claim that the agency’s “limited jurisdiction” hindered a thorough review of the protests, portraying it as a reaction to the unfavorable outcome.

SpaceX’s selection was deemed to be in accordance with the established evaluation criteria and procurement regulations.

The report clarifies that NASA retained the discretion to award a single contract, even after initially expressing interest in multiple awards.

Furthermore, the GAO found no evidence of unfair bias in the proposal evaluation process.

A Singular Decision

Image Credits: SpaceX

The rationale behind awarding a contract to only one company, rather than two, is explicitly detailed in official documentation. The announcement repeatedly emphasized that the awarding of contracts was dependent on available funding. While NASA may have initially intended, anticipated, or even desired to select two companies, the language clearly indicated a commitment to awarding “up to two” or “one or more.”

Consider the scenario where only one proposal fulfilled all necessary requirements; would NASA be obligated to allocate funds to an unqualified applicant? The answer is demonstrably no, and this situation largely dictated the outcome.

Insights from the report reveal:

The Government Accountability Office (GAO) report clarifies that NASA’s decision-making process prioritized technical approach, followed by price, and then management capabilities – encompassing organizational structure and scheduling. Each submitted proposal underwent independent evaluation based on these criteria, with subsequent comparison of the final scores.

Image Credits: GAO / NASA

Further details from the report indicate:

Upon finalization of the NASA budget, the Human Landing System (HLS) program received less funding than projected, necessitating difficult choices. Fortunately, a proposal emerged that was technically comparable to, or even superior to, others, demonstrated stronger organizational capabilities, and presented a reasonable cost. This made SpaceX the logical choice for contract award.

However, with limited resources, NASA faced constraints. Blue Origin subsequently contended that they should have been given an opportunity to revise their proposal. They suggested that negotiation with NASA could have yielded a more competitive offering. (Jeff Bezos’s subsequent $2 billion offer underscores potential flexibility in their initial bid.)

NASA, however, had already reached a conclusion, as confirmed by the GAO:

Despite redactions, the core issue is apparent. While SpaceX possessed some financial flexibility – potentially shifting funds within a range of a few hundred million dollars – Blue Origin and Dynetics faced a significantly greater challenge. Reducing their costs by half or more to meet the same fiscal targets was deemed unfeasible.

As explained by NASA’s selection team at the time:

Blue Origin protested that NASA should have alerted them to potential budget-related limitations in the selection process. The GAO, however, noted that the federal budget is publicly accessible and that the concerns were raised only after the award was made. Timeliness is crucial for such complaints to be considered, and the GAO found no evidence suggesting a warning would have altered the outcome.

The question of whether selecting a single provider is “anticompetitive and unduly risky,” as the protests alleged, was also addressed. The GAO acknowledged that “these important questions of policy may merit further public debate,” but deemed the complaint irrelevant given NASA’s budgetary constraints. While increased funding for space exploration would be desirable, the agency’s decision to allocate existing resources effectively remains justifiable.

The Outcome of the SpaceX Contract Dispute

Image Credits: Joe Raedle / Getty Images

Both Blue Origin and Dynetics voiced concerns regarding the contract award process, alleging a bias favoring SpaceX. They claimed an unfair assessment of each company’s capabilities and vulnerabilities. However, the Government Accountability Office (GAO) dismissed these claims as unsubstantiated.

Blue Origin, for example, argued that the initial announcement lacked a specific requirement for landing capabilities in darkness. This argument was quickly refuted; the requirement was present, and furthermore, the environment of space is inherently dark. A functional design must account for this fundamental condition.

Another point of contention involved the evaluation of communication systems proposed by both Blue Origin and SpaceX. Both were initially identified as not fully meeting specified criteria.

However, Blue Origin’s system received a designation of “significant weakness,” while SpaceX’s was merely labeled a “weakness.” This discrepancy was presented as evidence of preferential treatment. The GAO, however, disagreed.

The GAO stated: “A simple review of the evaluation records clearly demonstrates substantial differences between the proposals, justifying NASA’s differing assessments.” Specifically, four of Blue Origin’s communication links failed to operate as intended, with a fifth being unreliable. SpaceX, in contrast, only had two links with issues.

The report further elaborated:

Blue Origin protested that SpaceX received positive recognition for prioritizing crew safety, health, and comfort, despite these features not being explicitly mandated. The GAO affirmed NASA’s right, as an expert agency, to consider such aspects as valuable. Indeed, objecting to a competitor’s capsule being more comfortable may necessitate a reevaluation of one’s own priorities.

Image Credits: Blue Origin

Even if some of the challenges to the decisions had been successful, the ultimate outcome would not have been altered, according to the report.

SpaceX’s evaluation scores were as follows:

• Technical: 3 significant strengths; 10 strengths; 6 weaknesses; and 1 significant weakness
• Management: 2 significant strengths; 3 strengths; and 2 weaknesses

Blue Origin’s evaluation scores were:

• Technical: 13 strengths; 14 weaknesses; and 2 significant weaknesses
• Management: 1 significant strength; 2 strengths; and 6 weaknesses

Accepting defeat gracefully is often difficult, but the data indicates a clear victory for SpaceX across nearly all critical evaluation factors. Dynetics’ complaint suffered a similar fate, receiving even more critical scrutiny.

This report provides a detailed account of the shortcomings in the proposals from Blue Origin and Dynetics. This level of review would have been unnecessary had the companies accepted the results and acknowledged that NASA’s decision was not motivated by bias. They lost the bid legitimately, and their protests now portray them as unsuccessful competitors rather than viable contenders.