Blue Origins is suing NASA over a failed bid to participate in the agency’s lunar contract, continuing a proud tradition of litigation when losing.
Bezos other company, Amazon, made headlines when it sued over losing out to Microsoft in a bid for the Pentagon’s $10 billion JEDI contract. Microsoft accused Amazon of using the suit as a way to gain access to Microsoft’s bid, and then lowering its own to match, essentially doing an end-run around the blind bidding process.
Ultimately, despite initial rulings upholding the Pentagon’s contract award, Amazon kept the contract tied up so long that the Pentagon was forced to abandon it in the interests of being able to move forward and modernize its IT infrastructure. This decision was reached despite those initial rulings displaying that Microsoft clearly offered the better value.
It appears Bezos is following the same strategy in the space race, launching a lawsuit to compensate for an inferior bid. His Blue Origin company is one of the prime competitors to Elon Musk’s SpaceX. Both companies were bidding on NASA’s contract for a lunar lander. Initially, NASA had expressed interest in having two companies produce competing products, but was forced to choose a single one due to budgetary constraints, ultimately going with SpaceX’s bid.
Bezos’ company took multiple steps to get back in on the action, offering to waive $2 billion in fees and appealing the decision with the US Government Accountability Office (GAO). Blue Origin argued in the appeal that since NASA had previously — under a broad agency announcement (BAA) — said it preferred to award the contract to two companies, it should be forced to do so, especially since Blue Origin wasn’t allowed to modify or lower its original bid.
The GAO denied the appeal, emphasizing that NASA properly notified the bid participants of the ground rules:
We deny the protests because the BAA expressly put all offerors on notice that the number of awards was subject to available funding and the agency could make multiple contract awards, a single award, or no award at all
SpaceX and Blue Origin were rated “Acceptable” in the “Technical” portion of the bid (with a third, Dynetics, rated “Marginal”). However, SpaceX was the clear winner in the “Management” section of their bid, receiving an “Outstanding” grade to Blue Origin’s “Acceptable.” Even more telling was the price difference, with SpaceX coming it at $2,941,394,557, compared to Blue Origin’s whopping $5,995,463,651. Even accounting for Bezos’ willingness to waive $2 billion, Blue Origin’s base price was still $1 billion higher, with a less impressive “Management” grade.
It’s clear why the Source Selection Authority chose SpaceX (clear, perhaps, to everyone but Bezos). SpaceX had the higher rating in “Management” and “also had, by a wide margin, the lowest initially-proposed price.”
Needless to say, Bezos’ strategy isn’t winning much admiration.
Still others on Twitter were quick to reference an interview Bezos did, describing how quickly the original lunar lander project moved forward and the contract awarded to the winning company. Bezos even said in that interview: “Today there would be three protests and the losers would sue the federal government because they didn’t win…the thing that slows things down is procurement…it’s become the bigger bottleneck than the technology.”
Well said Jeff Bezos, well said. Now go back to litigating your losing bid.