The U.S. Government Accountability Office denied protests July 30 that Blue Origin and Dynetics filed of NASA’s award of a single lunar lander contract to SpaceX.
The United States is about to take its next giant leap into space – the return of U.S. astronauts to the moon by 2024, this time to stay. As the final step in landing astronauts on the moon, the Human Landing System (HLS) will play a significant role in the success of the Artemis program. However, the path forward is as precarious as it is aggressive, and NASA’s decision to rely on a sole company (SpaceX) to land our astronauts on the surface of the moon has made a challenging operation even riskier. Perhaps more importantly, funding a single HLS provider deprives NASA of the benefits of competition among contractors.
NASA’s decision to award nearly $3 billion to SpaceX in April to produce the HLS has resulted in a rising tide of political and expert opinion calling for NASA to issue a second contract. Not only have both overlooked parties – Dynetics and the National Team led by Blue Origin – protested the award, but the Senate has voted to require that NASA issue a second award in order to restore competition and reduce program risks. A House appropriations subcommittee has also advanced a bill that increased funding for the HLS program, but was silent as to any requirements in regards to spending.
Competition is the engine of entrepreneurialism. Without it, SpaceX and other companies will lack the impetus to produce a superior product at the best price. In mature industries, a competitive marketplace is maintained through the enforcement of antitrust laws. However, when NASA creates an industry from whole cloth, it is the responsibility of NASA to also create the conditions of a competitive marketplace: by awarding multiple contracts for the product and service. Our capitalist system, defined by healthy competition, is the greatest advantage that the United States has as other countries, including China and Russia, jostle in space for geopolitical supremacy. In a mission as complicated as returning to the moon, the United States needs the most innovative technologies that only a competitive market can produce.
Kathy Lueders said it best on her first day as the head of NASA’s Human Exploration and Operations Mission Directorate, when she christened her era of leadership with the motto “exploration is a team sport.” NASA’s vision, as she went on to explain in her inaugural statement, is for NASA to create a competitive marketplace where NASA will simply be another customer, shopping for the best deal to put their payload in orbit or on the moon:
We took a risk with industry by encouraging commercial innovation in a new market with the end goal of government becoming a customer of low-Earth orbit services, hopefully one of many.
Her comments show obvious pride (and rightly so) in NASA’s innovative procurement programs in recent years. NASA played a groundbreaking role in funding the development of new reusable rocket technology which transformed the U.S. launch service industry. Programs calling for Commercial Crew Development, Commercial Resupply Services, and Commercial Orbital Transportation Services spawned a legion of launch service providers that operate (or plan to operate) in low Earth orbit, with the most notable being SpaceX, Boeing, and Northrop Grumman.
How did NASA accomplish this? By awarding multiple contracts after competitive bidding. The bidding process ensures healthy competition during the contest for a contract – but the awarding of multiple contracts ensures that the competition will continue post-award because there will be a multiplayer industry where companies will continue to compete for contracts (whether with NASA or with other customers).
NASA understands the benefits of competition and has largely moved to the model of awarding contracts to multiple companies. In the call for bids for the HLS project, NASA foreshadowed their intent to give multiple awards; but then, clearly under financial pressure after Congress allocated only 25% of the requested funding for the HLS program, NASA issued a single award to SpaceX. By doing this, NASA eliminated all competition and with it all of the benefits of the marketplace.
Along with eliminating competition, the decision to issue a single award jeopardizes reliability. Lueders said as much in her inaugural statement: “We took a risk with industry . . .” The risk is that, despite NASA’s funding, the selected companies could fail to reliably deliver the needed products/services at a reasonable price. As Scott Pace, formerly executive secretary of the National Space Council, recently pointed out: “It is very dangerous to go to just one [contractor].” The risks of working with a single contractor are nothing new. In the days of the Apollo program, NASA ensured the reliability of a contractor’s work by being far more “hands on” in how they monitored it. Today’s procurement model mitigates reliability risk in a different way: by issuing multiple awards, and thereby maintaining redundant providers of the product/service.
It is not too late to correct course. Both unsuccessful bidders still have viable bids. Even smaller split awards would maintain the competition model. If the reduced size of the awards slows the timeline, then Congress will simply have to increase funding. At the moment, it appears that Congress may intervene and force NASA’s hand (if the House follows the lead of the Senate). But it would be far better if NASA took the opportunity of its own accord, after considering the actions of the Senate and expert opinion, to issue a second (or even a third) award in order to maintain a competitive field in the industry and enhance overall reliability of our human landing systems. By taking action, NASA would be sending a clear message that it is dedicated to creating a vibrant competitive industry of lunar landing technology that will help ensure that the U.S. maintains its position of leadership in space.
Prof. Mark J. Sundahl is a professor of law and the director of the Global Space Law Center at Cleveland State University. He currently serves on NASA’s Regulatory and Policy Committee and is the principal of Astralex LLC which provides consulting services to a range of industry clients, including a company involved in the HLS bidding process. All opinions are those of the author alone.
WASHINGTON — NASA is seeking proposals to begin the next phase of Artemis lunar lander services, moving quickly despite unresolved protests about its selection of SpaceX to develop a lunar lander.
NASA issued a request for proposals July 1 for what it calls “Sustainable Human Landing System Studies and Risk Reduction.” The solicitation, Appendix N of NASA’s Next Space Technologies for Exploration Partnerships (NextSTEP) program, will fund initial studies of landers to support the agency’s later phases of the Artemis program after the initial Artemis 3 landing.
The studies will enable companies to mature their designs for crewed lunar landers and provide feedback to NASA on proposed standards and specifications, such as a series of trade studies on aspects of the lander architecture. The studies would also support specific risk reduction activities proposed by companies for their landers.
NASA announced plans for NextSTEP Appendix N in late April, shortly after awarding a $2.9 billion contract to SpaceX as the sole winner of the Human Landing System (HLS) competition for development of a lander and a single demonstration mission with astronauts. NextSTEP Appendix N is intended to be the first step in the future Lunar Exploration Transportation Services (LETS) program to acquire landing services after the Artemis 3 mission.
“This announcement is a chance for the pioneering private sector to claim their stake in the emerging lunar economy and make history with NASA,” Lisa Watson-Morgan, NASA HLS program manager, said in an agency statement about the new solicitation.
At an industry day May 3, Watson-Morgan said NASA anticipated making “a few” awards at about $15 million each. The request for proposals will support proposals worth up to $45 million, or up to $100 million if options for additional work are exercised. NASA did not disclose how much total funding is available.
Proposals are due to NASA Aug. 2 with awards expected in the fall. That deadline has raised concerns in industry because it comes just two days before the deadline for the Government Accountability Office to rule on protests filed by Blue Origin and Dynetics regarding NASA’s selection of SpaceX for the single HLS award. While the GAO could rule on the protests at any time before Aug. 4, the complexity of the two protests has led both industry observers and NASA officials, including Administrator Bill Nelson, to expect a ruling on Aug. 4.
One industry source, speaking on background, noted that NASA issued the NextSTEP Appendix N request for proposals without first issuing a draft version for comment. It gives the appearance, that person said, of NASA trying to rush this through before the GAO rules on the protests or before Congress weighs in on the program.
A NASA authorization bill included in broader competitiveness legislation passed by the Senate June 8 would direct NASA to select a second HLS company, authorizing about $10 billion for the overall HLS program through 2025. The House has yet to take up its own NASA bill, though, and appropriators are only now beginning work on fiscal year 2022 spending bills.
“They’re trying to make it a fait accompli,” the source said of NASA’s efforts to get ahead of both Congress and the GAO on its lunar landing services program. “I’ve never seen an agency do this kind of thing before.”
An outside expert agrees that the way the competition is structured puts Blue Origin and Dynetics in a bind. “The timing may compel the protesters to basically ‘conceding’ to participate in the NASA-defined process leading to LETS,” said Greg Autry, professor at Arizona State University’s Thunderbird School of Global Management and a former White House liaison at NASA during the Trump administration. Those companies “will surely feel pressure to respond simply to stay in the game.”
However, Autry said he was relieved that NASA is moving ahead with the LETS effort. The agency’s decision to select only one company, with just one guaranteed landing, “left me worried that the agency was contemplating a ‘touch and go’ on the moon” with no sustained presence before shifting focus to human Mars missions.
“In particular, it is good to see the words ‘sustaining’ and ‘sustainable’ all throughout this document,” he said of the solicitation. “I think that tacitly acknowledges a post-Artemis 3 presence. The structure of this also addresses my criticisms of the single vendor award in that any long-term lunar surface activity that depends on a single system is unsafe and a noncompetitive market will be unaffordable, in the long run.”
For months, NASA had strongly suggested that it would select two companies for the next phase of its Human Landing System (HLS) program. Just as with the commercial cargo and crew programs, agency officials said, having two companies develop and demonstrate lunar landers would provide redundancy and ensure NASA was getting the best deal.
“Competition — having multiple suppliers for us — is an extremely important principle,” Mark Kirasich, director of NASA’s advanced exploration systems division, which includes the HLS program, said at a conference in February.
So, it was a surprise when NASA announced April 16 that it had picked just one company for what it calls an “Option A” award to develop a lunar lander and fly a single demonstration mission with astronauts on board. Even more surprising was the company NASA selected: SpaceX, whose Starship vehicle appeared massively oversized for the job. However, the end of the HLS competition does not necessarily mean the end of the overall competition to send astronauts to the surface of the moon.
“THIS IS ACTUALLY DOABLE”
Going into the HLS Option A competition, SpaceX was widely considered the underdog. It received the smallest of the three base period awards for the program in April 2020, at $135 million, compared to Blue Origin’s $579 million and Dynetics’ $253 million. NASA’s assessment of those original proposals graded SpaceX lower than Blue Origin and Dynetics, with limited confidence “in SpaceX’s ability to successfully execute on its proposed HLS development schedule,” according to a source selection statement.
But at the April 16 announcement — held late on a Friday afternoon with just a couple hours’ notice — NASA said SpaceX offered not only the best proposal, but the only one the agency could afford. “It was in NASA’s best interest, along with the budget that was there, for us to award to one,” said Kathy Lueders, NASA associate administrator for human exploration and operations.
In the source selection statement for the Option A competition, SpaceX had a technical score of “Acceptable,” the same as Blue Origin and higher than Dynetics’ “Marginal.” Its managerial score of “Outstanding” beat out the “Very Good” scores from the other two companies. But the biggest difference was price: SpaceX bid $2.89 billion, while Blue Origin was “significantly higher” than that; Dynetics was “significantly higher” than Blue Origin.
That price difference was a key factor for NASA, which received only $850 million for the HLS program in fiscal year 2021, one-fourth of its original request. Lueders wrote in the source selection statement that “at the initial prices and milestone payment phasing proposed by each of the Option A offerors, NASA’s current fiscal year budget did not support even a single Option A award.” NASA then asked SpaceX to make an unspecified change to its payment schedule, but not its overall price, before making an award.
That ruled out, she argued in the document, picking a second company, even if NASA asked it to lower its price. After selecting SpaceX, she wrote, “the amount of remaining available funding is so insubstantial” it wasn’t feasible to ask either company to revise their proposals.
NASA said little at the announcement about the technical merits of SpaceX’s Starship lunar lander, beyond that it met or exceeded various requirements. “SpaceX also, I’m sure, will be very happy to talk about their strategy,” Lueders said. But SpaceX wasn’t represented at the briefing and the company, which eschews press releases and routinely ignores media inquiries, said nothing beyond a single tweet stating it was “humbled” to win the contract.
A week later, SpaceX Chief Executive Elon Musk discussed the HLS award during a NASA briefing about the launch of the Crew-2 commercial crew mission. “It’s definitely going to be really helpful funding the Starship program,” he said. Asked later in the briefing if a 2024 Starship lunar landing with astronauts was feasible, he agreed.
“Yeah, I think so,” he said, then paused. “I think it will happen. I think 2024 seems likely. We’re going to aim for sooner than that. This is actually doable.”
Neither Blue Origin nor Dynetics are giving up on their lunar lander ambitions. On April 26, the companies filed separate protests with the Government Accountability Office, seeking to overturn the HLS Option A award.
Both companies alleged in their protests that NASA improperly evaluated the technical merits of their proposals and, in the words of Blue Origin’s protest, “unreasonably favored” SpaceX’s proposal. Blue Origin, for example, claimed NASA improperly concluded there were problems with its lander’s communications system, while Dynetics argued NASA overlooked the steps the company was taking to reduce the mass of its overweight lander.
The two companies also took issue with the rationale NASA used to select a single company. Blue Origin revealed in its protest that it bid $5.99 billion for the HLS Option A award. While twice as high as SpaceX’s bid, it argued that the combination of the two would have cost NASA about the same as what it spent on the commercial crew program, which supported Boeing and SpaceX.
Blue Origin complained that NASA didn’t give it a chance to revise its bid. Brent Sherwood, senior vice president of advanced development programs at Blue Origin, said in the protest that had NASA informed the company that budget issues would preclude the agency from making two awards, “Blue Origin would have welcomed the opportunity to offer specific adjustments in a revised proposal.”
Dynetics took a somewhat different approach. It argued that NASA overlooked several alternatives when it decided to make a single award, from going back to the companies for revised proposals to canceling the solicitation entirely. Another option it highlighted was for NASA to use the available funding for multiple awards of “sustainable” lander studies, a separate contract line item in the solicitation, rather than a single Option A award.
“This whole mechanism was set up to be very flexible, and they didn’t really use the flexibility they had,” a source familiar with Dynetics’ protest said.
Those protests are now in the hands of the GAO, which has until Aug. 4 to sustain or deny them. NASA announced April 30 it was suspending work on the HLS award it gave to SpaceX “until GAO resolves all outstanding litigation related to this procurement.”
To many, the protests are not surprising, given they’re common for any large government procurement. “I expected them to come. They’re a normal part of life in Washington,” said Rep. Don Beyer (D-Va.), chair of the House space subcommittee. “The authorities will sort through it and we will move on.”
Others in Congress are taking a different approach to giving companies a second chance at HLS. The Senate Commerce Committee approved May 12 a NASA authorization bill as an amendment to legislation for the National Science Foundation called the Endless Frontier Act.
The amendment, introduced by Sen. Maria Cantwell (D-Wash.), chair of the committee, is similar to a NASA authorization bill that the Senate approved at the end of the last Congress. This version includes a new “competitiveness within the Human Landing System program” provision that directs NASA to have no fewer than two companies under contract to develop lunar landers within 30 days of the bill’s enactment, and authorizes $10.032 billion for the HLS program — slightly above the combination of the SpaceX and Blue Origin bids.
The committee didn’t discuss the amendment, which passed on a voice vote, and it’s uncertain the amendment will make its way to a final version of the bill. However, Cantwell previously stated she was disappointed NASA did not pick two companies for HLS. “I think there needs to be redundancy, and it has to be clear in this process that it can’t be redundancy later. It has to be redundancy now,” she told Bill Nelson, the nominee for NASA administrator, during his April 21 confirmation hearing.
LETS MAKE A DEAL
Nelson, at that hearing, said he supported the agency’s approach to the HLS procurement, including its plans to accelerate the acquisition of lander services that will be open to competition. “Those competitions will be there,” he promised Cantwell.
NASA is proposing to acquire lander missions after the single Option A mission through a program called Lunar Exploration Transportation Services (LETS). NASA foresees LETS being a full and open competition, with multiple companies winning contracts to transport astronauts to the surface of the moon and back, similar to its space station commercial cargo and crew contracts.
The actual LETS competition is “still a few steps away,” cautioned Lisa Watson-Morgan, NASA HLS program manager, in an April 29 statement. The first of those steps was a request for information (RFI) asking industry for input on how to structure the LETS program.
NASA will follow with a broad agency announcement as soon as June to fund risk reduction work for those lunar landers. At a May 3 industry day, Watson-Morgan said NASA would make several awards, but each would likely be no more than $15 million, a tiny fraction of the development cost of a lunar lander. “We do not have a tremendous amount of dollars,” she said.
That could be too little and too late for some companies that don’t have wealthy founders or other access to capital. “Putting out an RFI for something that’s a couple years from now, well, there’s not going to be anybody left,” said one industry source. “Other than billionaires who can choose to keep things around, you’re not going to have others left in the game that are going to give you real competition.”
Even a company like Blue Origin that’s funded by billionaire Jeff Bezos will be at a disadvantage to SpaceX in any LETS competition thanks to SpaceX’s HLS award. That assumes, though, that SpaceX will successfully develop Starship on a schedule like what it proposes.
“I tend to be somewhat optimistic with respect to schedules,” Musk said, laughing, during the Crew-2 press conference shortly before he predicted a 2024 landing. “Also, we need to be, like, not making craters.”
He laughed again. “We’ve got some work to do, but we’re making rapid progress.”
This article originally appeared in the May 2021 issue of SpaceNews magazine.
WASHINGTON — An amendment to a Senate bill would require NASA to select a second company for its Human Lander System program, a provision some fear could upend the overall effort to return humans to the moon as soon as 2024.
The Senate Commerce Committee approved in a markup session May 12 a NASA authorization bill as an amendment to the Endless Frontier Act, a bill that would establish a new technology directorate for the National Science Foundation. The amendment was one of dozens considered by the committee during the session, which ultimately approved the bill on a 24–4 vote.
The amendment, known as the Space Preservation and Conjunction Emergency (SPACE) Act of 2021, is a version of a similar bill the Senate considered in 2020 but was not enacted. As the name suggests, it addresses issues associated with space traffic management, including directing the Office of Space Commerce to handle civil space traffic management responsibilities.
The amendment, though, also includes a NASA authorization for fiscal year 2021 similar to one the Senate approved at the end of 2020. A new provision in that amendment covers “competitiveness within the Human Landing System program,” the NASA program to fund development of crewed lunar landers. NASA awarded a single HLS “Option A” contract to SpaceX April 16 valued at $2.89 billion to develop a lander based on the company’s Starship vehicle and to fly a single demonstration mission.
The amendment directs NASA to fund development of “not fewer than 2 entities” in the HLS program no later than 30 days after the bill is enacted. It would authorize a total of $10.032 billion for the program, although funding would have to be appropriated separately, and on an annual basis.
The language has raised questions about how it would be implemented. It is unclear how the agency would select a second provider, as it could not run a new procurement within 30 days. Selecting one of the losing Option A bidders, Blue Origin or Dynetics, based on their original proposals could prompt a protest from the other company or from SpaceX, according to industry sources. The Government Accountability Office is reviewing protests filed by Blue Origin and Dynetics about NASA’s selection of SpaceX for the single HLS award, with a decision due by Aug. 4.
“By purchasing commercial services to take astronauts from lunar orbit to land on the surface of the moon, we will ensure a robust deep space transportation system is in place as we learn to live and work on another world for the benefit of all. NASA is unable to comment on the proposed amendment due to ongoing litigation of the recent Human Landing System selection,” the agency said in a statement to SpaceNews, referring to the GAO protests.
Neither that provision nor the overall amendment was discussed by the committee during its markup. However, the chair of the committee, Sen. Maria Cantwell (D-Wash.), has previously made clear she was disappointed that NASA, citing budget constraints, selected only one company for HLS Option A awards.
“I have to say I was surprised last week about the Human Landing System development contract,” Cantwell said at the April 21 confirmation hearing for Bill Nelson’s nomination to be NASA administrator. Nelson, during the hearing, committed to accelerating a competition for a future lunar landing services, but Cantwell pushed for faster action. “I think there needs to be redundancy, and it has to be clear in this process that it can’t be redundancy later. It has to be redundancy now.”
There is no guarantee that this language will make it into the final version of the bill, assuming it passes both the House and Senate. Efforts to pass NASA authorization legislation of any kind in recent years have foundered because of disagreements between the House and Senate and the relatively low priority of such legislation.
NASA has started planning for those follow-on service contracts, known as Lunar Exploration Transportation Services (LETS). NASA issued a request for information April 28, seeking feedback on a proposed broad agency announcement that NASA plans to issue this summer before the overall LETS procurement.
That broad agency announcement, known as Appendix N of the Next Space Technologies for Exploration Partnerships (NextSTEP) program, would support initial risk reduction work for the later LETS procurement. At a May 3 industry day, Lisa Watson-Morgan, NASA HLS program manager, said the agency hopes to issue a formal request for proposals in June and make selections between August and October.
The awards, though, will be no more than about $15 million each, and have periods of performance of only 7 to 12 months. “The funding is TBD,” she said. “We think we are able to award a few at $15 million.”
The later LETS award could include some funding for design, development, testing and evaluation work, although specific details remain uncertain, Watson-Morgan said. The contracts would cover at least six missions starting in the late 2020s, she said, with at least two missions per contractor.
On April 23, SpaceX launched a crew of international astronauts to the Space Station. This marks the third human spaceflight success for the firm’s Crew Dragon Capsule, developed under NASA’s Commercial Crew program. The amazing accomplishments of this program and of its predecessor, Comercial Orbital Transportation Services (COTS), which funded development of SpaceX’s Falcon 9 rocket and the cargo version of Dragon, depended not only on great engineering by SpaceX and other NASA vendors, but also upon the power of system redundancy and market competition. Both programs succeed, in great part, because NASA had two systems and two vendors. While we celebrate that, it appears that those lessons were not fully internalized on Capitol Hill.
During my service on the previous NASA transition team (2016-2017), one of the first decisions we faced was the question of continuing the Obama-era Commercial Crew program. That effort to deliver American astronauts to the International Space Station on commercial capsules was running years behind schedule due to the reluctance of Congress to fully fund the NASA request. There were also technical challenges facing both vendors, Boeing and SpaceX. Meanwhile, the loss of COTS payloads in both 2014 and 2015 demonstrated both the vulnerability of complex systems as well as the power of redundant systems to achieve programmatic objectives. With Commercial Crew vehicles behind schedule and on half-funding, some members of our team and some senior NASA officials supported a downselect of the program to a single vendor, so they could fully fund one system. I opposed that.
I felt strongly that technical redundancy and market competition were central to the principle of commercial space contracting. Any one system would leave us with the vulnerabilities that had plagued the space shuttle program. On the two occasions when a shuttle was lost, the United States was out of the space business for three years of investigations and re-engineering. Without the redundancy of Russian vehicles, the 2003 Columbia disaster would likely have resulted in abandonment of the International Space Station and a $100 billion U.S. investment and put the remaining station crew at risk. A failure of such magnitude could have marked the end of NASA human spaceflight.
Shuttle flights were also far more expensive than their originally projected costs, in part because the program became “too big to fail.” This is a condition NASA and the Defense Department have faced with many single vendor programs, including the current James Webb Space Telescope, the Space Launch System and the infamous F-35. The competition for the award and the intentions of the contract are easily lost once the governmental buyer lacks the leverage provided by having another vendor. Skipping competition in actual services is not an option.
Thankfully, Commercial Crew went forward with two vendors and funding was ticked up a bit. It worked. SpaceX now provides regular access to ISS on American rockets launched from American soil, rendering recent Russian threats to leave the space station less concerning. Meanwhile, Boeing, which experienced software failures during the demonstration flight of their CST-100 Starliner is re-flying that $400 million mission on their own dime. Redundancy saves lives and competition saves money.
I was therefore frustrated by NASA’s announcement of April 16 that, due primarily to insufficient congressional funding, they were downselecting the lunar Human Landing System (HLS) for the Artemis program from three to just one vendor, SpaceX. Selection of SpaceX’s Starship pleased me in that it represents a uniquely bold vision for space transportation to the moon, to Mars and beyond. Further, SpaceX has demonstrated the ability to outperform its competitors while receiving smaller awards that it effectively leverages with significant amounts of private capital. NASA’s source selection statement is intended to provide a non-political overview of all of the vendors’ merits in technical approach, management approach and cost. The document released last this month suggests that SpaceX offered more bang for the Buck Rogers. The firm also has a strong recent history of delivering for NASA.
However, as a student of history and someone who has been there, no amount of such analysis will convince me that a single vendor solution is the right option here. The proposals from Blue Origin and Dynetics also merit development. Congress must sufficiently fund the HLS program for the currently selected vendor and provide for competition. NASA’s vague promises of future services contracts for undefined lunar missions after Artemis 3, will not suffice for companies expected to invest billions of dollars and retain thousands of workers on their payrolls. NASA must clarify its commitment to a sustained lunar presence and future lunar transportation requirements.
I have immense respect for the fine choices President Biden has made with his NASA nominees, including the selection of former Sen. Bill Nelson for administrator, Pam Melroy as deputy administrator, Margaret Vo Schaus as CFO and particularly acting Chief of Staff Bhavya Lal who has done yeoman’s work to support the continuity of the Artemis program. I hope that team will work to convince OMB and Congress that in an environment as unforgiving as space, nothing is more expensive than short-term financial thinking. They must insist on funding adequate to support HLS competition, now. If they do not, we may someday find ourselves paying China for rides to the moon.
Greg Autry is a Clinical Professor of Space Leadership, Policy and Business with the Thunderbird School of Global Management at Arizona State University. He serves as Chair of the Safety Working Group on the Commercial Space Transportation Advisory Committee at the FAA. The opinions expressed here are his own.
WASHINGTON — Dynetics has joined Blue Origin in filing a protest of NASA’s selection of SpaceX for a single Human Landing System award, a move that could force the agency to suspend work on the program.
In a statement April 27, Dynetics said it filed a protest of the HLS award with the Government Accountability Office the previous day. Blue Origin, the other losing bidder in the competition, filed its own protest of the award with the GAO the same day.
“Dynetics has issues and concerns with several aspects of the acquisition process as well as elements of NASA’s technical evaluation and filed a protest with the GAO to address them,” the company said in a statement to SpaceNews. “We respect this process and look forward [to] a fair and informed resolution of the matter.”
The company did not elaborate on the specific “issues and concerns” it had with the HLS acquisition process, but noted it believed “NASA’s initial plan for continued competition remains the best approach to ensure program success.” The company said it would not comment further on the protest.
NASA selected one company, SpaceX, for an “Option A” award April 16 to fund development of a crewed lunar lander and a demonstration mission, after earlier indicating that it would select one or two companies. The agency said in a source selection statement that budget shortfalls made it impossible for the agency to select two, and had to ask SpaceX, the lowest bidder, to revise its proposed payment schedule to fit into its budget profile.
Of the three bidders, Dynetics was the lowest ranked. It had a technical rating of “Marginal,” one step below the “Acceptable” that Blue Origin and SpaceX received. Its Management rating of “Very Good” was the same as Blue Origin but one step below SpaceX’s “Outstanding.”
In the source selection statement, Kathy Lueders, NASA associate administrator for human exploration and operations, said the Dynetics lander “suffered from a number of serious drawbacks” that increased risk. The lander was overweight, which at this early stage of development “calls into question the feasibility of Dynetics’ mission architecture and its ability to successfully close its mission as proposed,” she wrote. The evaluation also questioned the maturity of the technology for performing in-space cryogenic fluid transfer required to refuel the lander, as the company planned.
Lueders concluded that “while Dynetics’ proposal does have some meritorious technical and management attributes, it is overall of limited merit and is only somewhat in alignment with the objectives as set forth in this solicitation.” The document only stated that Dynetics’ proposal had a price “significantly higher” than Blue Origin’s proposal, which in turn was significantly higher than SpaceX’s winning bid of $2.89 billion. Blue Origin disclosed in its protest that it bid $5.99 billion.
NASA made the HLS award so that it could seamlessly shift from the original “base period” contracts issued nearly one year ago and set to expire April 30 to the Option A award. However, NASA Acting Administrator Steve Jurczyk said it’s uncertain if the two protests will suspend that work.
“We’ve been made aware of the protests by both Blue Origin and Dynetics from GAO,” he said during an April 27 webinar by the Space Transportation Association. “It’s too soon to be determined whether that’s going to delay moving forward or whether we can keep things moving forward. We’re working through that right now.”
In September 2014, Sierra Nevada Corporation filed a protest of NASA’s award of commercial crew development contracts to Boeing and SpaceX. NASA instructed those two companies to stop work on those contracts, but within a couple weeks lifted those stop-work orders, citing “statutory authority available to it” to allow work to continue while the GAO reviewed the protest. GAO dismissed the protest in January 2015.
WASHINGTON — Blue Origin filed a protest with the Government Accountability Office April 26 over NASA’s decision to select only SpaceX for its Human Landing System (HLS) program, arguing the agency “moved the goalposts” of the competition.
The company, in a lengthy filing with the GAO, claimed that in addition to not giving companies the opportunity to change their proposals to reflect the agency’s reduced budget for HLS, NASA improperly evaluated aspects of its proposal as well as the one by SpaceX, the company that won the $2.89 billion contract April 16 to develop a crewed lunar lander and perform a demonstration mission.
“NASA has executed a flawed acquisition for the Human Landing System program and moved the goalposts at the last minute,” the company said in a statement provided to SpaceNews about its protest. “In NASA’s own words, it has made a ‘high risk’ selection.”
Blue Origin says in the GAO protest that its “National Team,” which included Draper, Lockheed Martin and Northrop Grumman, bid $5.99 billion for the HLS award, slightly more than double SpaceX’s bid. However, it argues that it was not given the opportunity to revise that bid when NASA concluded that the funding available would not allow it to select two bidders, as originally anticipated. NASA requested $3.3 billion for HLS in its fiscal year 2021 budget proposal but received only $850 million in an omnibus appropriations bill passed in December 2020.
“NASA’s source selection rationale improperly justifies the selection of a lone provider as a result of ‘anticipated future funding for the HLS Program,’” Blue Origin’s protest states. It notes that the combination of its bid and SpaceX’s bid, about $9 billion, is similar to what NASA spent on the commercial crew program, where NASA “made two awards with less available funding and less out-year funding certainty.”
“Blue Origin was plainly prejudiced by the Agency’s failure to communicate this change in requirements,” it states, by not giving the company an opportunity to revise its proposal. “Blue Origin could have and would have taken several actions to revise its proposed approach, reduce its price to more closely align with funding available to the Agency, and/or propose schedule alternatives” if given the opportunity by NASA.
Brent Sherwood, senior vice president of advanced development programs at Blue Origin, said in an affidavit included in the protest that the company received no feedback from the company’s proposal until NASA notified it April 16 that the agency had not selected it for an award.
“If NASA had notified Blue Origin that the Source Selection Official’s assessment of available out-year budget would preclude an award absent a repriced Blue Origin proposal, Blue Origin would have welcomed the opportunity to offer specific adjustments in a revised proposal,” he wrote, such as having the company pay a greater share of the overall development cost.
Blue Origin also criticized NASA’s assessment of Blue Origin’s proposal on several technical and managerial grounds. That includes a claim in the source selection statement that the proposal included advanced payments not allowed in the proposal and thus grounds for ruling the proposal ineligible for an award, and another that raised questions about the communications system for the lander.
The company also argued that NASA “unreasonably favored” SpaceX’s Starship lander in its evaluation. SpaceX, it argued, needs to develop a fully reusable heavy-lift launch vehicle rapidly and use “never-before-tested on-orbit refueling” to be successful. “In contrast, Blue Origin’s proposal is compatible with existing launch vehicles, utilizes only 3 launches, and employs heritage systems that have been flight tested,” it argued.
“The Agency unreasonably favored SpaceX’s evaluation by minimizing significant risks in SpaceX’s design and schedule, while maximizing the same or similar risks in Blue Origin’s proposal,” it concluded. “Such an evaluation is unreasonable and prejudiced Blue Origin.”
Blue Origin argued that, by selecting SpaceX, NASA is jeopardizing the broader commercial space industry. “This single award endangers domestic supply chains for space and negatively impacts jobs across the country, by placing NASA space exploration in the hands of one vertically integrated enterprise that manufactures virtually all its own components and obviates a broad-based nationwide supplier network,” it stated. “Starship is incompatible with other U.S. commercial launch vehicles, further restricting NASA’s alternatives and entrenching SpaceX’s monopolistic control of NASA deep space exploration.”
“Their decision eliminates opportunities for competition, significantly narrows the supply base, and not only delays, but also endangers America’s return to the moon. Because of that, we’ve filed a protest with the GAO,” Blue Origin said in its statement to SpaceNews about its decision to protest the HLS award.
Protests of major NASA contracts are not uncommon. In 2014, Sierra Nevada Corporation protested NASA’s selection of Boeing and SpaceX for commercial crew development awards. The GAO, though, rejected that protest in January 2015.
Blue Origin is no stranger to GAO protests either. It filed a “pre-award” protest of the National Security Space Launch Phase 2 procurement in 2019, arguing that the terms of request for proposals did not allow a full and open competition. The GAO sustained one aspect of that protest, regarding looking at the best value of proposals “when combined,” but rejected other aspects of it. Blue Origin ultimately did not win a launch contract, but did not file a GAO protest.
In a December 2020 report, the GAO said it sustained 15% of protests it resolved in fiscal year 2020, compared to 13% in fiscal year 2019. The main reasons for sustaining protests were unreasonable technical evaluations, flaws in the solicitation, and unreasonable evaluations of cost or past performance.
WASHINGTON — NASA has selected SpaceX as the sole company to win a contract to develop and demonstrate a crewed lunar lander, while keeping the door open for others to compete for future missions.
NASA announced April 16 that it awarded a contract to SpaceX for Option A of the Human Landing System (HLS) program, which covers development of a crewed lunar lander and a demonstration mission. The fixed-price, milestone-based contract has a total value of $2.89 billion.
SpaceX was one of three companies that received initial HLS contracts nearly one year ago for early design work on their lander concepts. SpaceX offered a version of its Starship vehicle, launched on its Super Heavy booster and refueled in low Earth orbit before going to the moon.
NASA officials previously stated they would attempt to make more than one Option A award in order to preserve competition in the program. “Competition — having multiple suppliers for us — is an extremely important principle. It’s on our minds,” Mark Kirasich, director of the advanced exploration systems division at NASA, said in February.
However, in a hastily arranged call with reporters to announce the selection of only SpaceX, officials acknowledged that limited budgets forced them to select only SpaceX. The agency received $850 million for the HLS program in fiscal year 2021, about one-fourth its original request.
“We weighed a lot of things, including what we’re getting from the demonstration mission, what we want for our potential future procurement for our sustainable landers, and it was in NASA’s best interest, along with the budget that was there, for us to award to one,” Kathy Lueders, NASA associate administrator for human exploration and operations, said.
In a source selection statement, NASA said that SpaceX’s price was lower than the other two teams, led by Blue Origin and Dynetics, “by a wide margin.” SpaceX received a technical rating of “Acceptable” and management rating of “Outstanding,” compared to a technical rating of “Acceptable” and management rating of “Very Good” for Blue Origin and “Marginal” and “Very Good” ratings for Dynetics. Blue Origin’s price was “significantly higher” than SpaceX and Dynetics was “significantly higher” than Blue Origin.
Lueders, the source selection authority for HLS, concluded that while Blue Origin’s proposal “has merit,” she did not select it for a second Option A award “because I find that its proposal does not present sufficient value to the Government” and because of the limited funding after selecting SpaceX for one award. “I do not have enough funding available to even attempt to negotiate a price from Blue Origin that could potentially enable a contract award.”
Dynetics fared even worse, with Lueders concluding that its proposal “is overall of limited merit and is only somewhat in alignment with the objectives as set forth in this solicitation.”
That Option A award will support development of the Starship lunar lander, and include at least one uncrewed test flight to land on the lunar surface before NASA proceeds with a crewed mission. “We want to make sure that everything is checked out and everything is ready” before putting NASA astronauts on the spacecraft, said Lisa Watson-Morgan, NASA HLS program manager.
However, after that crewed demonstration mission NASA will procure landing services through a separate contract. Agency officials said they will accelerate planning for that contract, where NASA will procure landing services for multiple missions. “As early as next week, we’ll be engaging industry for their input on how to best fashion and enable competition for this very important acquisition,” said Kirasich at the media briefing.
That future contract will be a full and open competition, allowing the other HLS competitors and perhaps other companies to compete with SpaceX. Any competitor, though, would be at a disadvantage as they will lack SpaceX’s Option A contract to fund lander development.
Another open question is the schedule for SpaceX’s Option A mission. Steve Jurczyk, NASA acting administrator, said the request for proposals put in a 2024 goal for that mission. However, he noted the agency is currently performing a “comprehensive review” the overall Artemis program, including schedules and budgets. He said earlier in the briefing that NASA’s goal was to return humans to the lunar surface “as quickly and safely as possible.”
“These human-rated system developments are very complex, and there is risk. The NASA team will have the insight into the progress that SpaceX is making,” he said. “If they’re hitting their milestones, we may have a shot at 2024.”
“We always fly when it’s safe,” Lueders added.
SpaceX, which did not participate in the NASA briefing, issued only a tweet acknowledging winning HLS. “We are humbled to help @NASAArtemis usher in a new era of human space exploration,” the company wrote.
NASA has selected Starship to land the first astronauts on the lunar surface since the Apollo program! We are humbled to help @NASAArtemis usher in a new era of human space exploration → https://t.co/Qcuop33Ryz pic.twitter.com/GN9Tcfqlfp
— SpaceX (@SpaceX) April 16, 2021
Blue Origin, in a statement to SpaceNews, had little to say about the NASA selection of rival SpaceX over its “National Team” that included Draper, Lockheed Martin and Northrop Grumman. “The National Team doesn’t have very much information yet. We are looking to learn more about the selection.” Dynetics did not immediately respond to a request for comment.
One member of Congress, though, was critical of NASA’s decision. “I am disappointed that the acting NASA leadership decided to make such a consequential award prior to the arrival of a new permanent NASA administrator and deputy administrator,” said Rep. Eddie Bernice Johnson (D-Texas), chair of the House Science Committee.
Johnson had been critical of NASA’s approach of using industry partnerships to develop human landers and procure landing services, rather than a more conventional contracting approach, where NASA would own the vehicles and intellectual property.
“The decision to make the award today also comes despite the obvious need for a re-baselining of NASA’s lunar exploration program, which has no realistic chance of returning U.S. astronauts to the Moon by 2024,” she added, calling for the agency’s new leadership to “carry out its own review of all elements of NASA’s Moon-Mars initiative to ensure that this major national undertaking is put on a sound footing.”