The U.S. Air Force said on Thursday that it will clarify the criteria for its upcoming launch contract awards in response to a formal protest by Jeff Bezos' rocket-builder Blue Origin.
However, the change is unlikely to move the needle for Blue Origin's chances at winning a contract with its New Glenn rocket in development, Jefferies analyst Greg Konrad told CNBC.
"I think Blue Origin wanted to mature the technology further before a 'down select' and it doesn't appear that's happening," Konrad said.
Blue Origin argued to change the rules of the lucrative Launch Service Procurement (LSP) program, which pits Bezos' company against SpaceX, Northrop Grumman and United Launch Alliance – the joint venture of Boeing and Lockheed Martin.
LSP will see the Air Force dole out nearly three dozen launch contracts, each expected to be worth over $100 million on average. But only two of the four companies in the running will be awarded the contracts — posing a tougher challenge for Blue Origin to come out ahead against massive incumbents.
Earlier this year Blue Origin filed a "pre-award" protest with the Government Accountability Office, which the GAO sustained in a decision on Monday. The GAO said the rules set by the Air Force do not create a fair and competitive environment.
The service branch previously said it would name two companies based on how well the pair would fulfill the Air Force's needs "when combined," which the GAO found to be ambiguous. The Air Force's acquisition lead, Will Roper, said in a statement on Thursday that the branch will remove the phrase "when combined" from LSP's criteria.
"We will implement GAO's recommendation in a manner that should not materially delay contract award," Roper said. "The Air Force structured the launch competition where, to be eligible, companies must propose launch options capable of meeting the entire national security mission, and each company will be evaluated individually based on their ability to achieve this with acceptable risk."
Blue Origin CEO Bob Smith emphasized in a Sept. 25 interview with CNBC that any company that wins should be a key player in launching commercial U.S. spacecraft, rather than just military.
"The important element we're trying to highlight within ... the broader Air Force process is that there is a regular discounting of the commercial market that is a key factor in U.S. launch vehicle policy," Smith said.
While Roper's announcement comes in response to the GAO's decision, it does not guarantee Blue Origin a spot.
"Blue Origin was trying to be somewhat proactive with their protest, to not favor incumbents, but one of the biggest issues favoring new players is getting technology up to speed in time," Konrad said.
Blue Origin responded to CNBC's request for comment on the Air Force's announcement by pointing to an earlier statement regarding the GAO's decision.
"We want to thank GAO for their careful consideration of these serious issues, thoroughly reviewing the facts of the case, and recognizing the importance of ensuring evaluation criteria that are unambiguous and comply with federal procurement statutes and regulations," Smith said in the statement.