Blue Origin lawsuit: 4 facts revealed from released court documents

Blue Origin was denied a lucrative NASA lunar lander contract — but it’s refusing to go down without a fight. Now unsealed court documents show the nature of its SpaceX-centered lawsuit against the government agency.

The court document, posted in PDF form on CNBC, reveals Blue Origin believes NASA cut corners in order to grant SpaceX a contract, and shut Blue Origin and competitor Dynetics out. It accuses the agency of flouting rulemaking regulations in an “arbitrary, capricious, and irrational” way, and allowing SpaceX to address potential problems and skimp on Flight Readiness Reviews.

It was released Wednesday by the U.S. Federal Court of Claims, a new point on a growing timeline:

• September 2019: NASA calls for proposals for its lunar lander, accepting proposals through November of that year.
• April 2020: The agency announces its selection of Blue Origin, SpaceX, and Dynetics. It also releases details of the finalists’ vehicles. At the time, Blue Origin received the largest award. At least two other companies, Boeing and Vivace, submitted unsuccessful proposals.
• April 2021: NASA announces that it had selected SpaceX as the winner of the contract, though originally it had received the smallest award. That same month, Blue Origin files its protest to the GAO.
• July 2021: The GAO rejects Blue Origin’s protest, setting the stage for the lawsuit.
• August 2021: Blue Origin files a lawsuit against NASA.

Oral arguments on the suit begin in October, and a ruling could come as soon as early October.

The suit stems from a bid for lunar lander concepts as part of NASA’s Artemis program, which will see humans return to the Moon. Congressional appropriations cut the funding from two possible proposals to one. SpaceX was the lowest bidder, with Alan Boyle at GeekWire listing the respected proposal prices at $2.9 billion for SpaceX — $3 billion less than Blue Origin’s concept.

Here are four essential facts gathered from Blue Origin’s complaint:

4. Blue Origin believes NASA shut out competition

In an open letter in July, Blue Origin founder Jeff Bezos wrote:

“Instead of investing in two competing lunar landers as originally intended, the Agency chose to confer a multi-year, multi-billion-dollar head start to SpaceX. That decision broke the mold of NASA’s successful commercial space programs by putting an end to meaningful competition for years to come.”

However, while the original plan called for two selections, congressional appropriations only gave enough funding for one — which ultimately went to SpaceX. But Blue Origin alleges what amounts to favoritism, claiming NASA allowed SpaceX to bypass some procedures.

“Historically a staunch advocate for prioritizing safety, NASA inexplicably disregarded key flight safety requirements for only SpaceX, in order to select and make award to a SpaceX proposal that NASA’s evaluation team assessed as tremendously high risk and immensely complex, even before the waiver of safety requirements,” the filing says.

3. Blue Origin says SpaceX cut corners

The term Flight Readiness Review comes up repeatedly in the filings. It’s part of the core of the argument that SpaceX was allowed to bypass certain regulations:

“The waiver of thirteen (13) Flight Readiness Reviews permitted SpaceX to propose a technical solution that included sixteen or more launches in a launch cadence the Contracting Officer admitted was logically inconsistent with the Solicitation’s requirement for one Flight Readiness Review prior to each launch. In other words, SpaceX’s initial proposal was unawardable.”

The suit points out that while the Government Accountability Office (GAO) ultimately ruled in NASA/SpaceX’s favor, the office mentions that SpaceX did not meet that requirement, stating: “NASA ignored its contemporaneous documents and argued to GAO that a FRR was not required prior to each launch element.”

The GAO pointed out, according to the filing, that Blue Origin had met these requirements.

“Blue Origin and Dynetics did not get such a chance to compete with waived requirements the Agency afforded to SpaceX,” the filing states.

Musk, as he does, responded to these claims on Twitter with bafflement:

2. Because of this, the award should have fallen to Blue Origin

“Had NASA properly assigned a deficiency to SpaceX’s proposal for these errors, Blue Origin would have been next in line for award as the offeror with the second-highest rated technical proposal (the most important evaluation factor) and next lowest price,” the suit alleges.

It’s worth remembering that the GAO agreed with NASA on this, meaning it was allowed to proceed with the contract instead of moving to the Blue Origin rocket, which asked for twice as much as SpaceX.

GeekWire also reported that NASA believed the SpaceX proposal to not only be cheaper, but technologically superior.

1. The suit seeks a do-over within NASA

The suit reads:

“Blue Origin seeks a declaratory judgment, and a permanent injunction requiring the agency to: (i) terminate the illegal and erroneous award to SpaceX; (ii) conduct meaningful discussions or clarifications with Blue Origin as necessary; (iii) request final proposal revisions ("FPRs"); (iv) reevaluate proposals in accordance with the terms of the Solicitation; (v) make a valid determination consistent with the terms of the Solicitation; (vi) make a valid award determination based on the reperformed evaluation; and (vii) grant any further relief that the Court deems appropriate.”

In layman’s terms: Blue Origin believes the flight judgment was illegal and erroneous and wants NASA to address this with Blue Origin — before having all three contractors resubmit contract proposals in line with the language of the original terms. Only then does Blue Origin think NASA is in the right position to decide on the award.

The ultimate outcome they ask for if the suit is successful is for the court to :

“a) Declare that NASA's award of the HLS option A contract to SpaceX is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

b) Enjoin NASA and SpaceX from commencing or continuing performance of the HLS Option A contract;

c) Direct NASA to open discussions with all offerors, allow proposal revisions, reevaluate revised proposals, and make a new selection and award;

d) Award Blue Origin its attorney's fees and costs in pursuing this action, and/ or its proposal costs;

and e) Grant Plaintiff such further relief as the Court may deem just and proper.”

There’s more at stake here than just Blue Origin’s ego: According to Insider, NASA administrator Bill Nelson believes that the lawsuit could delay the 2024 launch date of the first human Artemis missions.