WASHINGTON — A federal judge rejected Blue Origin’s lawsuit again NASA’s Human Landing System procurement on nearly every ground, even after the company offered to further increase its contribution to the program.
The Court of Federal Claims released Nov. 18 a public version of Judge Richard A. Hertling’s opinion in the suit, filed by Blue Origin Aug. 13. Hertling ruled against the company, and in favor of NASA and SpaceX, Nov. 4, but at the time offered no details pending agreement by the parties on a public version of the opinion.
“The Court finds that Blue Origin does not have standing because it did not have a substantial chance of award but for the alleged evaluation errors,” he concluded. “Its proposal was priced well above NASA’s available funding and was itself noncompliant. Blue Origin argues that it would have submitted an alternative proposal, but the Court finds its hypothetical proposal to be speculative and unsupported by the record.”
Even if Blue Origin has standing, he added, the company would have lost on the merits of the case. “Blue Origin has not shown that NASA’s evaluation or its conduct during the procurement was arbitrary and capricious or otherwise contrary to law. NASA provided a thorough, reasoned evaluation of the proposals, and NASA’s conduct throughout the procurement process was not contrary to law.”
Blue Origin has argued that NASA ignored a requirement that bidders include a flight readiness review (FRR) before the launch of each element of the lander systems. SpaceX failed to do so for each of its Starship tanker launches, but NASA did not disqualify SpaceX’s proposal. When Blue Origin first protested to the Government Accountability Office, that argument was rejected because the GAO concluded the other companies would not have changed their proposals.
In the suit, Blue Origin said it did have an alternative design for a “single-element Integrated Lander” analogous to SpaceX’s Starship. “Blue Origin would have proposed a large number of launches and Low Earth Orbit rendezvous events, allowing for the incorporation of elements such as a propellant depot in Low Earth Orbit to be refueled by multiple launches,” the company said in documents cited in the judge’s opinion.
Hertling was not convinced. “Blue Origin has not submitted any contemporaneous documentary evidence to support its allegations of its alternative architecture,” he wrote. “Blue Origin’s alternative proposal is purely speculative, including hypothetical pricing and hypothetical technical ratings.”
Blue Origin also argued that NASA engaged in “improper and unequal discussions” by making post-award negotiations with SpaceX, including to revise the schedule of milestone payments to fit into the agency’s budget profile, but not offering to negotiate with Blue Origin.
In July, Blue Origin founder Jeff Bezos offered to effectively reduce its original $6 billion by $2 billion if NASA would give his company a second HLS award. Hertling’s opinion notes that, during the case, Blue Origin Chief Executive Bob Smith upped that offer to more than $3 billion, wiping out the different between its original bid and SpaceX’s $2.9 billion price.
Hertling noted that the rules of the HLS solicitation required each bidder to offer “its best approach” to meeting the program’s requirements. “Faced with this explicit direction, Blue Origin chose to submit a proposal that did not include a $2 or $3 billion corporate contribution,” he wrote. “Blue Origin’s effort to conduct public-relations negotiations after the award in the context of its bid protest is insufficient to support a finding of prejudice.”
NASA was within its rights to not negotiate with Blue Origin because the company’s proposed milestone payments for 2021 were more than triple the $345 million the agency has available for the program. “Considering the funding shortfall, even if the Court found that either NASA’s evaluation of SpaceX was improper or SpaceX’s proposal was unawardable, Blue Origin cannot show that it would be in a position for award.”
Blue Origin has also argued that NASA should have revised the terms of the HLS procurement once it was aware of a funding shortfall. However, Hertling also rejected that argument, noting that the company had to be aware of the reduced funding and its implications because it spent nearly $1 million on lobbyists in the fourth quarter of 2020, when Congress finalized the fiscal year 2021 spending bill: “it is inconceivable that Blue Origin would lobby Congress itself and pay others to lobby on its behalf and not be kept informed of the outcome of these efforts.”
Hertling was, at times in the opinion, particularly blunt in his dismissal of Blue Origin’s claims. “Blue Origin is in the position of every disappointed bidder: Oh. That’s what the agency wanted and liked best? If we had known, we would have instead submitted a proposal that resembled the successful offer, but we could have offered a better price and snazzier features and options,” he wrote after rejecting its arguments for an alternative lander concept.
While Blue Origin had the option to appeal the decision, it elected not to do so. “Not the decision we wanted, but we respect the court’s judgment, and wish full success for NASA and SpaceX on the contract,” Bezos tweeted Nov. 4.
The decision allowed NASA to finally start working with SpaceX on the HLS award after stays first for the GAO protest and then for the federal lawsuit. NASA Administrator Bill Nelson said Nov. 9 that he was able to speak with SpaceX President Gwynne Shotwell about the HLS award the day after the court ruling, but lamented nearly seven months of delays that contributed to moving the first Artemis crewed lunar landing from 2024 to no earlier than 2025.