Bezos' Blue Origin, in lost NASA lawsuit, raised offer to cover $3 billion in lunar lander costs

KEY POINTS

• Jeff Bezos' Blue Origin raised its offer to cover NASA costs of an astronaut lunar lander from $2 billion to "over $3 billion" as the company battled in federal court.
• The sweetened offer came as Bezos' company fought NASA's decision to solely award SpaceX with a $2.9 billion contract under the agency's Human Landing System (HLS) program.

Amazon and Blue Origin founder Jeff Bezos provides the keynote address at the Air Force Association's Annual Air, Space & Cyber Conference in Oxen Hill, MD, on September 19, 2018.

Jim Watson | AFP | Getty Images

Jeff Bezos' Blue Origin this fall raised its offer to cover NASA costs of an astronaut lunar lander by more than $1 billion, as the company battled in federal court over the agency's award of a contract to Elon Musk's SpaceX.

The space billionaires' lunar lander saga — with NASA caught in the middle — began in April, when SpaceX became the sole winner of a $2.9 billion contract to use Musk's Starship rocket for the agency's Human Landing System (HLS) program. The decision led Blue Origin to protest with the Government Accountability Office, arguing that there were "fundamental issues with NASA's decision."

In July, days before the GAO denied Blue Origin's protest, Bezos offered NASA to cover up to $2 billion over the first two years of the contract. In the open letter to NASA, Bezos said it was "not too late to remedy" the situation. NASA did not publicly respond to the offer and, after Blue Origin sued the agency in August, the company sweetened the offer during its court protest this fall.

Blue Origin CEO Bob Smith raised the proposal from $2 billion in private funding "to over $3 billion." Smith said in court that the company would "add valuable competition" and help in covering NASA's "budget and funding shortfall" for the program that led to the agency selecting just one company for the HLS contract.

U.S. federal judge Richard Hertling, in the court's opinion released on Thursday explaining why Blue Origin lost the lawsuit, wrote that "Blue Origin's effort to conduct public-relations negotiations after the award in the context of its bid protest is insufficient to support a finding of prejudice."

"These post-award offers to contribute funds were not before NASA at the time it made its award, and NASA had no obligation to ask Blue Origin to improve its proposal by absorbing costs or lowering the price," Hertling noted.

The U.S. Court of Federal Claims said Blue Origin's lawsuit did not have standing "because it did not have a substantial chance of award" and, even if it did have standing, the company "would lose on the merits" of the case.

"Blue Origin argues that it would have submitted an alternative proposal, but the Court finds its hypothetical proposal to be speculative and unsupported by the record," Hertling wrote in the court's opinion.