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Blue Origin offers to waive $2 billion in NASA payments in bid for moon landing contract

UPDATED: Mon., July 26, 2021

Blue Origin's New Shepard rocket sits on the landing pad near Van Horn, Texas, last Tuesday. Jeff Bezos's Blue Origin spaceflight company has offered to cover up to $2 billion in NASA contract fees to return astronauts to the moon.  (Associated Press)
Blue Origin's New Shepard rocket sits on the landing pad near Van Horn, Texas, last Tuesday. Jeff Bezos's Blue Origin spaceflight company has offered to cover up to $2 billion in NASA contract fees to return astronauts to the moon. (Associated Press)
By Aaron Gregg Washington Post

Jeff Bezos’s Blue Origin spaceflight company has publicly offered to cover up to $2 billion in NASA contract fees so it can remain involved in the U.S. government’s effort to return astronauts to the moon.

The long-shot bid to persuade the space agency to change course comes after Elon Musk’s SpaceX was selected in April as the primary contractor to build the moon lander and given a $2.9 billion contract for the work.

Blue Origin countered Monday with a highly-unusual open letter signed by Bezos (Bezos owns The Washington Post). In it, he criticized NASA’s decision to rely on a single company for the moon lander, an approach he said would “put an end to meaningful competition for years to come” by locking the government into SpaceX’s rocket technology.

He offered to pour billions of dollars in company funding into the effort in exchange for a seat at the table.

“Without competition, NASA’s short-term and long-term lunar ambitions will be delayed, will ultimately cost more, and won’t serve the national interest,” Bezos wrote in the letter.

It’s unclear whether and how NASA will respond. A NASA spokesperson did not immediately respond to a request for comment.

The open offer from Bezos marks a significant departure from the normal pace of government procurement, which usually happens behind closed doors through a scripted, bureaucratic process. It is rare for offers and counteroffers to spill into the public domain.

But NASA is in a unique position because both SpaceX and Blue Origin are deep-pocketed commercial spaceflight companies that are comfortable with paying to develop their own technology. And Blue Origin can argue that NASA strayed from its original vision by going with a single contract.

The “human landing system” was initially supposed to involve two manufacturers, something that would let the government benefit from redundancy across systems and also give it leverage in any future negotiations. But the agency said it did not have enough room in its budget to issue more than one contract. The $2.9 billion contract given to SpaceX fit within the agency’s budget only because SpaceX agreed to modify its payment schedule, according to a NASA document obtained by The Washington Post.

Blue Origin already has formally challenged the award to Space X.

In a solution offered “for [NASA’s] consideration” on Monday, Bezos said Blue Origin would effectively pay for the first two fiscal years of technology development itself by waiving up to $2 billion in fees, while “government appropriation actions catch up.” Bezos also offered to cover the costs of an un-crewed test mission to prove its lunar lander is safe. In exchange, Blue Origin would get a contract with a fixed price and cover any cost-overruns, according to the letter.

“NASA veered from its original dual-source acquisition strategy due to perceived near-term budgetary issues, and this offer removes that obstacle,” Bezos wrote.

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