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Blue Origin loses lawsuit against federal government over NASA’s human lunar lander contracts

A monthslong struggle comes to an end

Jeff Bezos’ spaceflight venture Blue Origin has lost out on its lawsuit against NASA over a contract to build the space agency’s next human lunar lander. The judgement puts an end to Blue Origin’s monthslong quest to receive government funding to develop the company’s lander, called Blue Moon, for NASA.

Judge Richard Hertling, who oversaw the federal court case, issued a short ruling today, noting that Blue Origin’s motion for judgement had been denied. The opinion has not been issued publicly yet. All the parties involved will propose which parts they want redacted before the opinion is released openly on November 14th.

Blue Origin had hoped to be involved in NASA’s ambitious plan to return humans to the Moon, an initiative called the Artemis program. To achieve this goal, NASA is working with various companies in the space industry to build rockets and spacecraft that would help send the first woman and the first person of color to the lunar surface. A critical part of that plan entails building a privately made lunar lander that can safely carry people to and from the lunar dirt.

Prior to giving out contracts for the lunar lander, NASA publicly hinted that it would select two companies to build these vehicles as a way to have redundancy and some competition. The agency eventually narrowed down the selection to three finalist companies, including Blue Origin, SpaceX, and a company called Dynetics. Then in April, NASA surprised everyone by awarding just one contract to SpaceX, which asked for $2.9 billion to develop the company’s monster Starship spacecraft.

NASA attributed its decision to select one company instead of two to a lack of funding for its lunar lander program. NASA had requested $3.2 billion for its human lunar lander program for this year, but Congress only gave the space agency $850 million, about a quarter of what NASA had hoped for. Meanwhile, NASA has been striving to reach the lunar surface as early as 2024, an incredibly ambitious deadline that seems all but impossible with the budget shortfall. Given the lack of funding, NASA opted to stick with the company that proposed the cheapest option. Blue Origin requested $5.9 billion for its Blue Moon concept.

Since losing out on the contract, Blue Origin has pulled out all the stops to somehow reverse the decision. Initially, the company protested through the Government Accountability Office (GAO), but the GAO ultimately denied Blue Origin’s request. It also rejected a similar protest from Dynetics. The GAO argued that NASA “reserved the right to make multiple awards, a single award, or no award at all,” according to the office’s statement on its decision.

Then this summer, Bezos wrote a letter to NASA Administrator Bill Nelson, proposing to build Blue Moon for a discount of $2 billion over the next two years to bridge the “funding shortfall.” The extra money would have been provided by Bezos himself, who is currently the second wealthiest person in the world. However, NASA wasn’t swayed by the offer. As a last-ditch effort, Blue Origin sued in federal court to have the decision reversed.

NASA argued that Blue Origin “gambled” with its bid for the lunar lander program, which it ultimately lost. The company “made an assumption about the Agency’s [lunar lander] budget, built its proposal with this figure in mind, and also separately made a calculated bet that if NASA could not afford Blue Origin’s initially-proposed price, the Agency would select Blue Origin for award and engage in post-selection negotiations to allow Blue Origin to lower its price. All of these assumptions were incorrect,” NASA attorneys wrote in legal filings dated May 26th and obtained by The Verge through a Freedom of Information Act request.

In response to today’s ruling, NASA noted that there will be opportunities in the future for companies to work on the Artemis program. “In addition to this contract, NASA continues working with multiple American companies to bolster competition and commercial readiness for crewed transportation to the lunar surface,” NASA said in a statement to The Verge. “There will be forthcoming opportunities for companies to partner with NASA in establishing a long-term human presence at the Moon under the agency’s Artemis program, including a call in 2022 to U.S. industry for recurring crewed lunar landing services.”

Both Blue Origin’s protest with the GAO and its lawsuit wound up temporarily halting NASA’s contract with SpaceX. Now that the final decision has been made, NASA says that work will resume under SpaceX’s contract. On Twitter, SpaceX CEO Elon Musk made a joke about the ruling.

In response to today’s ruling, Blue Origin said it looks forward to continuing to work with NASA on potential future contracts. “Our lawsuit with the Court of Federal Claims highlighted the important safety issues with the Human Landing System procurement process that must still be addressed,” the company wrote in an emailed statement. “Returning astronauts safely to the Moon through NASA’s public-private partnership model requires an unprejudiced procurement process alongside sound policy that incorporates redundant systems and promotes competition. Blue Origin remains deeply committed to the success of the Artemis program, and we have a broad base of activity on multiple contracts with NASA to achieve the United States’ goal to return to the Moon to stay.”

Bezos also weighed in saying that the ruling was “not the decision we wanted, but we respect the court’s judgment, and wish full success for NASA and SpaceX on the contract.” The statement hinted that Blue Origin might not appeal the decision.

It’s also possible that NASA could award future contracts to Blue Origin and Dynetics, depending on the funding the agency receives in the future. Former NASA Administrator Jim Bridenstine testified before the Senate Commerce, Science, and Transportation Committee that he thinks the agency should have at least two lunar lander providers. The Senate Appropriation Committee’s draft budget bill for NASA issued in October would also direct NASA to pick a second provider.

Earlier this year, Administrator Nelson had requested an extra $5.4 billion for NASA’s human lunar lander program, with the aim of getting the money through President Biden’s proposed infrastructure policy. “I think at the end of the day, after all the shouting is over, after all the pushing and tugging, a lot of which has nothing to do with NASA, you will see that NASA will have the funds that it needs,” he said, according to Space News. However, after multiple revisions to Biden’s Build Back Better Act, the latest version of the bill would only provide an extra $1.1 billion for NASA, mostly aimed at repairing and modernizing the agency’s facilities and infrastructure.

Update November 4th, 1:30PM ET: This article was updated to include a statement and information from NASA, as well as a statement from Jeff Bezos.