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Starship lunar lander
NASA con move ahead with the contract it awarded to SpaceX to develop a lunar lander based on its Starship vehicle after the GAO rejected protests from the two losing bidders July 30. (credit: SpaceX)

Relaunching a lunar lander program

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No doubt there were some sighs of relief among NASA leadership on Friday afternoon, and they had nothing to do with the situation on the International Space Station.

“GAO first concluded that NASA did not violate procurement law or regulation when it decided to make only one award,” said the GAO’s Patton.

NASA leadership, including administrator Bill Nelson, had traveled to the Kennedy Space Center in hopes of observing the launch of an Atlas V carrying Boeing’s CST-100 Starliner on a second uncrewed test flight, a rerun of the December 2019 test flight cut short by problems with the spacecraft. But a day earlier, NASA postponed the launch after the station temporarily lost attitude control when the new Russian Nauka module, which docked to the station Thursday morning, started firing its thrusters hours later. Controllers were able to get the station reoriented after about an hour, but the incident led NASA to delay the launch until this week to give the station time to get back to normal.

The sighs of relief on Friday instead came instead in the form of a ruling from the Government Accountability Office (GAO) on protests filed by Blue Origin and Dynetics of the agency’s award of a single Human Landing System (HLS) contract to SpaceX (see “All in on Starship”, The Space Review, April 19, 2021). That award was surprising because NASA made only one award, rather than the two that had been expected, because of a projected shortfall in funding for the program.

The two losing bidders cried foul about that decision. “NASA has executed a flawed acquisition for the Human Landing System program and moved the goalposts at the last minute,” Blue Origin said in a statement in April when it filed its protest with the GAO. It claimed the agency didn’t communicate a change in funding to the companies and didn’t give it a chance to respond. “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,” the company stated in its protest.

Dynetics made a similar case. “In light of this new budget constraint and schedule change, the HLS program as originally conceived and as set forth in the Solicitation is no longer executable,” it said in its protest. “Accordingly, NASA had several reasonable (and lawful) alternatives to choose from in connection with this acquisition.” That included amending the solicitation or even withdrawing it and starting over.

The GAO disagreed. “GAO first concluded that NASA did not violate procurement law or regulation when it decided to make only one award,” said Kenneth E. Patton, managing associate general counsel for procurement law at GAO, in a statement about its decision. (The GAO has not yet released a version of the decision itself as it awaits details from the company about proprietary information that should be redacted from the public version of the decision.)

NASA, the GAO concluded, made clear that the number of awards was contingent on the funding it received, and that agency reserved the right to make just a single award or even none at all. “GAO further concluded there was no requirement for NASA to engage in discussions, amend, or cancel the announcement as a result of the amount of funding available for the program,” Patton wrote. “As a result, GAO denied the protest arguments that NASA acted improperly in making a single award to SpaceX.”

Blue Origin and Dynetics also argued that NASA improperly evaluated their proposals, giving them lower scores than they felt warranted. Blue Origin, for example, claimed NASA “unreasonably favored” SpaceX’s Starship, “minimizing significant risks in SpaceX’s design and schedule, while maximizing the same or similar risks in Blue Origin’s proposal.”

Dynetics complained that NASA used “unstated evaluation criteria” to downgrade its proposal. Several aspects of its lander considered by NASA a “significant strength” when it won its original HLS award in 2020 became just a “strength” in the latest competition despite any changes in the lander’s design. “The Dynetics design was not altered, only refined — what must have changed were NASA’s technical and programmatic evaluation criteria,” the company stated in its protest.

The GAO was not swayed by their arguments. “GAO next concluded that the evaluation of all three proposals was reasonable, and consistent with applicable procurement law, regulation, and the announcement’s terms,” Patton stated.

“The decision enables NASA to award the contract that will ultimately result in the first crewed demonstration landing on the surface of the Moon under NASA’s Artemis plan,” the agency said.

The GAO did conclude that NASA “waived a requirement of the announcement for SpaceX,” but didn’t elaborate on the requirement. Not that it mattered: “Despite this finding, the decision also concludes that the protesters could not establish any reasonable possibility of competitive prejudice arising from this limited discrepancy in the evaluation.” With that, the agency dismissed the two protests.

The dismissal of the protests means that NASA, which suspended work on the SpaceX contract three months ago, can now proceed with that work, something the agency confirmed in a statement late Friday. “The decision enables NASA to award the contract that will ultimately result in the first crewed demonstration landing on the surface of the Moon under NASA’s Artemis plan,” the agency said.

“We stand firm in our belief that there were fundamental issues with NASA’s decision, but the GAO wasn’t able to address them due to their limited jurisdiction,” Blue Origin said in a statement. “We’ll continue to advocate for two immediate providers as we believe it is the right solution.”

Dynetics “is appreciative of the GAO’s review of NASA’s Human Landing System Option A decision and while disappointed, we respect the GAO’s determination announced today,” the company said in its statement about the GAO dismissal of its protest.

Next steps and new competitions

The GAO decision allows NASA to speak up about both the HLS program and its broader Artemis plans. During the three months between the protest and the GAO’s ruling, the administration kept quiet. “We are prohibited by law, and the procedures and policies of the GAO, from commenting and getting in on this competition, this bid protest,” Nelson said at a press conference Thursday morning at KSC when asked about HLS. “I want you to ask me that question next week.” (The GAO had until August 4 to rule on the protests, and given the complexity of them many in the industry, as well as Nelson himself, thought the GOA would wait until that deadline to make its ruling.)

In the agency’s statement late Friday, NASA hinted it would soon reveal more details about its plans, including schedules. “Importantly, the GAO’s decision will allow NASA and SpaceX to establish a timeline for the first crewed landing on the Moon in more than 50 years,” the agency said. “As soon as possible, NASA will provide an update on the way ahead for Artemis, the human landing system, and humanity’s return to the Moon.”

Nelson, at the very least, hasn’t discarded the idea of landing humans on the Moon in 2024. “We have lost some time because there is this dispute,” he said at Thursday’s briefing. “Space is hard. There are always things that happen, especially when you’re developing new technology and going further and further.”

“We’re going when it’s safe,” he added.

Agency officials earlier suggested an update to the Artemis program and its schedule would come in August. “I think we’ll be looking at updating at least the first round of dates probably by the August timeframe,” Kathy Lueders, NASA associate administrator for human exploration and operations, said in early June at a briefing after a “State of NASA” event at NASA Headquarters.

The GAO decision capped off a week that started with an unsolicited proposal by Blue Origin. In an open letter to Nelson on Monday, Jeff Bezos offered to amend its HLS proposal if NASA would give it a second contract. Blue Origin would waive up to $2 billion in fees the company would be due over three fiscal years as well as conduct an uncrewed demonstration mission of its lander in Earth orbit at no cost to NASA.

“I am honored to offer these contributions and am grateful to be in a financial position to be able to do so,” Bezos wrote. “NASA veered from its original dual-source acquisition strategy due to perceived near-term budgetary issues, and this offer removes that obstacle.”

One question is how NASA would make a second award. Nelson declined to comment on Bezos’s letter last week, citing the ongoing protest.

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

One government contracts expert thinks it could be done in a relatively straightforward way since NASA used a “broad agency announcement” that remains open. “Since the proposals from the two offerors not selected in the original award remain valid, NASA is able to make one or more additional awards under the current BAA, as they originally announced they may do. NASA does not need to run a new competition,” said Alan Chvotkin, a partner and government contracts expert at Nichols Liu LLP.

NASA, though, would still have to come up with several billion dollars to fund a second award. Blue Origin’s bid was nearly $6 billion, so even with the prospect of waiving up to $2 billion, NASA would still need $4 billion that it currently says it doesn’t have: in April NASA said it had to renegotiate with SpaceX to restructure the $2.9 billion it bid to fit into its projected funding profile.

Nelson, at Thursday’s briefing, supported the idea of having competition in the HLS program, citing the benefits of competition in the commercial crew program. “I’m very optimistic at this point that Congress is going to give us some additional funds that will allow us to go forward with that competition,” he said.

Congress has not allocated much additional funding, though. A House version of a commerce, justice, and science spending bill for fiscal year 2022 provides NASA with only $150 million more for HLS than its request, for a total of $1.345 billion. The Senate has yet to take up its version of a spending bill.

Nelson previously told House and Senate appropriators that NASA would need more than $5 billion for a second HLS competitor, funding he suggested could be included in a jobs and infrastructure package. But the infrastructure bill being considered by the Senate this week includes nothing for NASA.

NASA is supporting competition on a much smaller scale. The agency issued a request for proposals for “Sustainable Human Landing System Studies and Risk Reduction” at the beginning of July. That solicitation, also known as 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.

“We’ll continue to advocate for two immediate providers as we believe it is the right solution,” Blue Origin said.

The awards, though, will be small: up to $45 million, or up to $100 million if options for additional work are exercised. They will, though, set the stage for the later Lunar Exploration Transportation Services (LETS) program, where NASA will buy lunar lander services in much the same way it buys cargo and crew services for the ISS now. NASA issued a request for information about LETS, with responses due this week, just days after the Appendix N proposals.

Industry responses to Appendix N and LETS are mixed. “We are excited about the opportunity presented by NASA’s HLS NextSTEP Appendix N competition that provides funding for continued design and risk reduction activities for a sustainable lander,” Dynetics said Friday. “We also plan to compete for NASA’s announced Lunar Exploration Transportation Services opportunity.”

Bezos, though, was critical of them in his open letter. “The Appendix N and LETS solicitations are just optical substitutes for the real competition that a second, simultaneous dissimilar lander development will provide,” he wrote.

“We’ll continue to advocate for two immediate providers as we believe it is the right solution,” Blue Origin said in its statement, citing support from Congress. “We’re also very encouraged by Administrator Nelson’s comments over the past week that reaffirm NASA’s original intent to provide simultaneous competition.”

Provided, of course, the funding it there. For now, at least, NASA can move ahead with SpaceX to work on its lander.

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