Bezos offers to waive $2 billion in payments to get lunar lander contract
In an open letter to NASA administrator Bill Nelson, Blue Origin founder Jeff Bezos offered to waive $2 billion in payments should NASA decide to switch its contract for building the manned lunar lander contract from SpaceX to the Blue Origin team, including Lockheed Martin, Northrop Grumman and Draper.
Blue Origin and its industry partners — including Lockheed Martin, Northrop Grumman and Draper — bid $6 billion to design and build a competing landing system. After SpaceX won the award, Blue Origin’s team and Dynetics, the third competitor for a NASA contract, filed protests with the Government Accountability Office. The GAO is due to rule on those protests by Aug. 4.
In his letter to Nelson, Bezos revisits the issues laid out in Blue Origin’s protest and complains that NASA “chose to confer a multi-year, multibillion-dollar head start to SpaceX” in the Human Landing System competition. He noted that NASA gave SpaceX a chance to revise its bid to fit NASA’s financial needs, and that Blue Origin wasn’t given a similar opportunity. “That was a mistake, it was unusual, and it was a missed opportunity,” Bezos wrote. “But it is not too late to remedy.”
Bezos then offered to waive all payments in the 2021-2023 fiscal years, up to $2 billion, “to get the program back on track right now.” He said that would be in addition to the $1 billion in corporate contributions that was previously pledged.
The article notes there may be some legal issues blocking such an offer. I also wonder what Blue Origins partners think about this. Has Bezos discussed it with them? Is he offering to cover their profits as well?
We must also be cognizant of one important detail: The Blue Origin team’s proposal lost the bid largely because was ranked below SpaceX’s for both financial and technical reaosns. Even more important, that team’s lander does yet not exist, even in prototype. No significant work has been done. And Blue Origin itself has so far failed to launch anything into orbit, with its orbital rocket New Glenn two years behind schedule. None of this inspires confidence.
SpaceX meanwhile has been test flying its Starship lander in repeated flight tests, demonstrating its capabilities.
Consider this bidding war from a custoner’s perspective. Blue Origin has yet to prove it can build what it promises. SpaceX is already doing so. And it bid less as well.
On August 4th the GAO will rule on the protests of both losers, Blue Origin and Dynetics. Anything can happen, but I strongly expect them to rule in favor of NASA and SpaceX.
And even if they do rule that the contract must be rebid, the bottom line remains: Blue Origin has got to stop trying to win its contracts in the courts, and finally start build the orbital spacecraft and rockets it has been promising for years. I have every faith it can be done. Bezos just has to get his company focused once again in doing so.
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In an open letter to NASA administrator Bill Nelson, Blue Origin founder Jeff Bezos offered to waive $2 billion in payments should NASA decide to switch its contract for building the manned lunar lander contract from SpaceX to the Blue Origin team, including Lockheed Martin, Northrop Grumman and Draper.
Blue Origin and its industry partners — including Lockheed Martin, Northrop Grumman and Draper — bid $6 billion to design and build a competing landing system. After SpaceX won the award, Blue Origin’s team and Dynetics, the third competitor for a NASA contract, filed protests with the Government Accountability Office. The GAO is due to rule on those protests by Aug. 4.
In his letter to Nelson, Bezos revisits the issues laid out in Blue Origin’s protest and complains that NASA “chose to confer a multi-year, multibillion-dollar head start to SpaceX” in the Human Landing System competition. He noted that NASA gave SpaceX a chance to revise its bid to fit NASA’s financial needs, and that Blue Origin wasn’t given a similar opportunity. “That was a mistake, it was unusual, and it was a missed opportunity,” Bezos wrote. “But it is not too late to remedy.”
Bezos then offered to waive all payments in the 2021-2023 fiscal years, up to $2 billion, “to get the program back on track right now.” He said that would be in addition to the $1 billion in corporate contributions that was previously pledged.
The article notes there may be some legal issues blocking such an offer. I also wonder what Blue Origins partners think about this. Has Bezos discussed it with them? Is he offering to cover their profits as well?
We must also be cognizant of one important detail: The Blue Origin team’s proposal lost the bid largely because was ranked below SpaceX’s for both financial and technical reaosns. Even more important, that team’s lander does yet not exist, even in prototype. No significant work has been done. And Blue Origin itself has so far failed to launch anything into orbit, with its orbital rocket New Glenn two years behind schedule. None of this inspires confidence.
SpaceX meanwhile has been test flying its Starship lander in repeated flight tests, demonstrating its capabilities.
Consider this bidding war from a custoner’s perspective. Blue Origin has yet to prove it can build what it promises. SpaceX is already doing so. And it bid less as well.
On August 4th the GAO will rule on the protests of both losers, Blue Origin and Dynetics. Anything can happen, but I strongly expect them to rule in favor of NASA and SpaceX.
And even if they do rule that the contract must be rebid, the bottom line remains: Blue Origin has got to stop trying to win its contracts in the courts, and finally start build the orbital spacecraft and rockets it has been promising for years. I have every faith it can be done. Bezos just has to get his company focused once again in doing so.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
Elon Musk & Akira The Don (June, 2020
“If You Don’t Make Stuff, There Is No Stuff”
https://youtu.be/nA4Ya-yKJ0A
3:23
Robert wrote: “Bezos just has to get his company focused once again in doing so.”
This is the key. Bezos left the operations of Amazon in order to pursue other interests, Blue Origin was assumed to be one of them. What did Bezos learn in his rapid growth of Amazon that he can bring to Blue Origin to quicken its pace and quality? These are two major issues in the news, these days, and Bezos has a lot of experience running a successful company. He should have a great abilities and ideas to bring to Blue Origin.
His letter suggests that Bezos is throwing money at the problem without rectifying the underlying problems. This does not work, but if his greater attention to Blue Origin solves these underlying problems, then Blue Origin could soon be in a good position to compete with and improve upon SpaceX’s products and services.
As for his complaint that NASA gave only one of the three bidders an opportunity to make adjustments to conform to the reality presented by Congress, then that was a bad bidding process. The only thing that could save NASA is that only SpaceX’s bid was low enough to be adjustable, but only if one company won the bid, but that seems a weak argument, as it ignores the possibility of creative juices from the other two bidders. Bezos could argue that he would provide a majority of the development costs, like SpaceX is doing, but Bezos would have to pretend that he was already developing his lander, just as SpaceX is developing theirs. As far as I know, Blue Moon was only a proposal, not a development project.
As far as I know, Blue Moon was only a proposal, not a development project.
Well, to be fair to Bezos, he did have a mock-up created for a presentation given two years or so ago. I can only assume that mock-up is fairly close to what they included in their bid.
BTW, did Blue Origin specify the launch vehicle for their lander? If it was New Glenn, that may be problematic for NASA as well.
“The only thing that could save NASA is that only SpaceX’s bid was low enough to be adjustable, but only if one company won the bid, but that seems a weak argument, as it ignores the possibility of creative juices from the other two bidders.”
Pretty much exactly that. Congress didn’t allot enough money for *any* of the three proposals, much less two of them as was originally planned. SpaceX had both the lowest bid (and the only one that could be made to fit inside the new budget, with some restructuring), the lowest technical risk, *and* by far the greatest payload and general usefulness. SpaceX was always going to be the first choice, and with the budget restrictions, they immediately became the *only* affordable choice.
Now, does that leave room for a protest? I feel like it’s a bit fuzzy. Bezos offering free stuff (with certain strings attached) alters his financial score, but not his technical risk score or the value his offer provides (which is little more than Apollo). I can’t see how BO can possibly get picked over SpaceX for this; if he’s serious, he should be lobbying Congress to add enough money for a second winner.
Bezos should rename his proposal the Selene Landing System. That would surely loosen some Congressional purse strings.
Bezos could claim that Starship is too big, too much of a gas guzzler, will do damage to the atmosphere every time it returns to Earth. Not that I know anything. Just saying that democrats in the country would love to take Elon out.
I would like to know more of what Bezos is trying to accomplish. It is not like he needs the NASA money to develop his rocket. He has been super innovative in his work with Amazon. AWS and the software that runs his warehouses. Now, the Amazon delivery network does an incredible job. He must be terribly disappointed that Elon got Starlink to work before he did.
Sounds like a bribe to me. It reminds me of the KC-X refueling air tanker competition over ten years ago. Northrup Grumman/Airbus won the bid, but to make a long story short, GAO stepped in along with some senators, and Boeing won.
Typical monkey business in D.C. Blue Origin holds back payments for two years, but I bet the project goes over budget and a bunch of change orders are charged later to the government to make up for those two years. Plus those two years are just R&D costs, so they can deduct those costs come tax time, and they won’t be charged anything because it can be written off as a loss. Get any accountant worth his salt, and he can deduct R&D costs from taxes owed.
Pretty much exactly that. Congress didn’t allot enough money for *any* of the three proposals, much less two of them as was originally planned.
Yes they did. The funding that Congress provided was sufficient to award contracts to two bidders for manned landings in 2028, as Congress intended. That may not have met Trump’s deadline, but Congress never bought into that. Congressional funding matched Congressional schedules, which is what was important to Congress.
SpaceX had…the lowest technical risk…
Which is just bonkers. SpaceX’s risk is off the charts, as was documented in the first phase downselect. But NASA chose to play a game of chicken with Congress, so they overlooked that.
It’s not the first time NASA has done this. Choosing the Rockwell Space Shuttle design over lower-risk alternatives comes to mind. *That* decision was nearly disastrous for the whole space program — manned and unmanned. We could very easily see a repeat of that.
Now, does that leave room for a protest?
Obviously, but probably not a successful one. The GAO is a group of bureaucrats. They’re only going to look at NASA’s bureaucratic processes. They’re not going to second-guess NASA’s engineering assessment of risk. So as long as NASA dotted all of their i’s and crossed all of their t’s, the GAO will deny the protest, and NASA will be stuck with Starship, just like they were stuck with the Space Shuttle and the X-33 Venturestar and the DoD was stuck with the F-22 and the F-35.
It reminds me of the KC-X refueling air tanker competition over ten years ago. Northrup Grumman/Airbus won the bid, but to make a long story short, GAO stepped in along with some senators, and Boeing won.
That contract was a clear case of Air Force malfeasance. They gave one set of requirements to Boeing and a different set of requirements to Northrop. Then they evaluated both bids to the requirements they gave to Northrop. Had Boeing been given the same requirements that Northrop had, they would have bid a 777-based tanker and probably won.
In that case, the Air Force would then have a KC-10 replacement, not a KC-135 replacement.
But unless NASA did something that egregious in their source selection, it’s hard to see how the GAO will uphold the HLS protest. I guess we’ll find out next week.
I think there should be a second lander-but it should be Dynetics Alpaca after the slim down I have heard rumors of. Blue’s National Team is said to have better abort options. Alpaca looks better in terms of use.
“NASA will be stuck with Starship”. How terrible to be stuck with a bid by competent go ahead company and a vehicle that is a modification of one in vigorous development. How is Boeing going with Starliner? A little behind at greater cost than Dragon 2 and a kludge of a design.
I think Spacex is going to have Starship ready to go to the moon in one shot. Same vehicle to launch, land and return including tons of cargo.
If Congress insists on pork for their districts they would slow down the return to the moon by decades
Jeff–
“Alpaca,” is a great Name.
mkent:
“Yes they did. The funding that Congress provided was sufficient to award contracts to two bidders for manned landings in 2028, as Congress intended. That may not have met Trump’s deadline, but Congress never bought into that.”
1. 2024 was still the legal mandate given to NASA, and no one in the new administration or Congress had changed that yet. What Congress’s sentiment was is beside the point (I mean, beyond the obvious sentiment to get jobs into key districts.)
2. I think 2028 is being optimistic, even if SpaceX was one of the two bidders chosen. That’s $9 billion you have to come up with now – while Congress was only providing $800M per fiscal year.
3. In any event, greatly stretched development schedules pose programmatic risk, too, right up to outright cancellation. There were a number of reasons for Commercial Crew’s delays, but the failure of Congress to adequately fund the program from the start had to have tacked on 18-24 months to initial launches.
Same vehicle to launch, land and return including tons of cargo.
The moon version (“HLS” is a terrible name) will probably not come back – and that’s probably a good thing. Leaving them on the surface (more accurately: returning them to the surface) builds up a lot of moon base infrastructure very quickly. I’m believing YouTube videos, but as I understand it, there _may_ be enough fuel to return to the lunar surface, but there will not be enough fuel to return to Earth.
The size difference between a moon Starship and the other lander proposals is crazy. If they can be parked near each other, they’ll hold a big research staff. Blasting that nasty moon dust all over everything when they set down seems as if it would be an issue for doing that, though.
mkent wrote: “But unless NASA did something that egregious in their source selection, it’s hard to see how the GAO will uphold the HLS protest.”
I was trying to say that the selection process was this bad, but I downplayed it a bit. I worked with a guy who ended up going to jail for giving a vendor an edge up on a bid on a fairly small job. The vendor owner went to jail and out of business, too. The potential reward was not worth the jail time. I’m not sure why NASA is not in more trouble for not informing the other two competitors of the changes, why there aren’t people at NASA facing jail time. That was a bad bidding process.
markedup2,
The lunar Starship (Lunarship?) will not remain on the surface but will bring the crew back to Gateway, or to Orion on the first flight. Tanker Starships (Tankerships?) will be needed to refuel the lunar Starship. But then, all of the proposed lander will need refueling.