NASA Halts $2.9B SpaceX Deal Amid Legal Challenge by Competitors


The contract between NASA and SpaceX, valued at $2.9 billion for the Human Landing System, has been temporarily halted due to a formal protest filed by competing companies.

Jeff Bezos’ Blue Origin and aerospace firm Dynetics brought their concerns to the Government Accountability Office, thereby freezing the initial payment to SpaceX and temporarily stalling the project.

SpaceX, owned by Elon Musk, was awarded the lunar lander contract by NASA on April 16, marking the agency’s first step towards returning astronauts to the moon since the historic Apollo era.

SpaceX Starship

Reacting to the filed protests, NASA released a statement expressing its inability to comment further due to ongoing legal proceedings.

Defying the expectations of splitting the contract between multiple parties, NASA awarded the project solely to SpaceX.

Blue Origin criticizes the space agency for last-minute changes in the selection criteria and for risking the ambitious 2024 moon landing target by relying on only SpaceX.

“Following the G.A.O. protests, NASA has instructed SpaceX to suspend work on the H.L.S. contract pending resolution of all related litigation,” a NASA official stated.

Bob Smith, Blue Origin’s CEO, highlighted the issues he perceives with the evaluation criteria, stating that NASA undervalued the technical risks presented by SpaceX and weighed cost factors too heavily. “It’s uncommon for NASA to commit such oversights,” he mentioned in an interview, emphasizing the importance of rectifying these alleged missteps for such a crucial mission.

Likewise, Dynetics has voiced its objections with various elements of the acquisition process and NASA’s technical review, seeking redress through a formal protest.

SpaceX’s Starship, which is a work-in-progress and aims to be a fully reusable vehicle for lunar and Mars voyages, was selected for its substantial cargo capacity and competitive pricing at $2.9 billion, in contrast to the higher bids from Blue Origin and Dynetics, as per NASA documents.

SpaceX has been actively testing prototypes of the Starship at its Texas site, although some tests have ended with explosive results during the landing phase.

Regardless of the halt on the NASA contract, SpaceX is expected to proceed with its independent Starship development.

In defense of its selection decision, NASA pointed out that its financial resources were limited by the funds allocated by Congress, which provided $850 million rather than the $3.3 billion required for two lunar landers.

SpaceX’s contractual win was deemed an essential first step in securing lunar transport solutions, according to NASA’s human spaceflight leader Kathy Lueders.

Over recent years, NASA has been partnering with private entities for the development and launch of space missions, an approach that has proven to be cost-effective. These partnerships have successfully resulted in the delivery of both supplies and astronauts to the International Space Station aboard Spacecraft’s Dragon module.

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