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Blue Origin offers to waive $2 billion in NASA payments in bid for moon landing contract


Jeff Bezoss Blue Origin spaceflight company has publicly offered to cover up to $2 billion in NASA contract fees so it can remain involved in the U.S. governments effort to return astronauts to the moon.

The long-shot bid to persuade the space agency to change course comes after Elon Musk's SpaceX was selected in April as the primary contractor to build the moon lander and given a $2.9 billion contract for the work.

Blue Origin countered Monday with a highly unusual open letter signed by Bezos, who owns The Washington Post. In it, he criticized NASA's decision to rely on a single company for the moon lander, an approach he said would "put an end to meaningful competition for years to come" by locking the government into SpaceX's rocket technology.

He offered to pour billions of dollars in company funding into the effort in exchange for a seat at the table.

"Without competition, NASA's short-term and long-term lunar ambitions will be delayed, will ultimately cost more, and won't serve the national interest," Bezos wrote in the letter.

It's unclear whether and how NASA will respond. As of late afternoon, NASA had not commented on how it might proceed. A NASA spokeswoman said the agency was aware of Bezos's letter but declined further comment, citing pending litigation.

The open offer from Bezos marks a significant departure from the normal pace of government procurement, which usually happens behind closed doors through a scripted, bureaucratic process. It is rare for the details of contract negotiations to spill into the public domain, and rarer still for interested bidders to throw out offers and counteroffers in pointed corporate blog posts.

The $2 billion olive branch is also abnormal. Although it's common for aerospace companies to invest corporate funds in technologies they intend to sell to the government, they typically prefer the government to underwrite as much of the development expenses as possible.

"I'm not sure there's any precedent for this," said Alan Chvotkin, a partner with the government contracts law firm Nichols Liu who is not affiliated with either Blue Origin or SpaceX. "It's of a magnitude that we rarely see . . . they're essentially putting $2 billion on the line."

NASA is in a unique position because both SpaceX and Blue Origin are deep-pocketed commercial spaceflight companies that are comfortable with paying to develop their own technology. And Blue Origin can argue that NASA strayed from its original vision by going with a single contract.

The "human landing system" was initially supposed to involve two manufacturers, something that would let the government benefit from redundancy across systems and also give it leverage in any future negotiations. But the agency said it did not have enough room in its budget to issue more than one contract. The $2.9 billion contract given to SpaceX fit within the agency's budget only because SpaceX agreed to modify its payment schedule, according to a NASA document obtained by The Post.

Blue Origin already has formally challenged the award to Space X.

In a solution offered "for [NASA's] consideration" on Monday, Bezos said Blue Origin would effectively pay for the first two fiscal years of technology development itself by waiving up to $2 billion in fees, while "government appropriation actions catch up." Bezos also offered to cover the costs of an un-crewed test mission to prove its lunar lander is safe. In exchange, Blue Origin would get a contract with a fixed price and cover any cost overruns, according to the letter.

"NASA veered from its original dual-source acquisition strategy due to perceived near-term budgetary issues, and this offer removes that obstacle," Bezos wrote.

Two procurement experts contacted by The Post said NASA probably could issue a contract under the terms spelled out in Bezos's letter. The Federal Acquisition Regulation, which governs most large purchases made by government agencies, does provide a framework for building procurements around "unsolicited proposals." And the specific structure of the moon lander contract, carried out through a "broad agency announcement" rather than a typical request for proposals, might provide the government leeway.

But it would be highly abnormal for a government agency to suddenly change course in response to a public pronouncement from someone interested in selling something to the government. Such an action could become fodder for future bid protests.

Franklin Turner, a government contracts attorney with the law firm McCarter & English who is not affiliated with either Blue Origin or SpaceX, said it would be highly unusual for NASA to reshape its plan after receiving a public request from a prospective bidder.

"It is entirely up to the agency as to how it's going to define its own requirements," Turner said. "But I would be very surprised to see NASA turn a dime in response to a proposal like this one."

Published : July 27, 2021

By : The Washington Post · Aaron Gregg