Can we get a do-over? —
“I think they realized it’s why they lost.”
Jeff Bezos published an open letter to NASA Administrator Bill Nelson on Monday morning and offered to pay more than $2 billion to get the agency’s Human Landing System program “back on track.” In effect, the founder of Blue Origin and world’s richest person says he will self-invest in a lunar lander because NASA does not have the money to do so.
NASA’s Artemis program aspires to land humans on the Moon by 2024 and establish a sustainable settlement on the surface. As part of this project, the agency is seeking reusable, affordable transportation to the Moon and back. It conducted a competition for a human lander (HLS) and announced in April that it would move forward with SpaceX and its Starship proposal. NASA had wanted two providers for such a lander, but due to low appropriations from Congress, it could afford only one.
Now, three months later, Bezos is offering to make up the difference out of his pocket. “Blue Origin will bridge the HLS budgetary funding shortfall by waiving all payments in the current and next two government fiscal years up to $2B to get the program back on track right now,” Bezos wrote. “This offer is not a deferral but is an outright and permanent waiver of those payments. This offer provides time for government appropriation actions to catch up.”
So why is Bezos offering to do this now? Ars hit the phones on Monday morning to get some answers.
technology news Why is this happening now?
The timing of Bezos’ letter does not seem coincidental. He was extraordinarily upset after losing to SpaceX and has launched a multi-pronged strategy to get back into the game.
After the HLS contract decision in April, Blue Origin filed a lengthy protest to the US Government Accountability Office. A ruling is expected within the next several weeks. Blue Origin’s second tactic was to lobby a local US senator, Maria Cantwell of Washington state, to add $10 billion to NASA’s budget to pay for Blue Origin’s lander. Although the Senate passed the addition, the House said no, and it seems to have been a dead end.
So now, Bezos is turning to his third tactic after NASA’s decision on the lander award. In this case, he seems to be saying, “OK, maybe I could just pay for this myself.”
technology news Why didn’t Blue Origin win the HLS contract, anyway?
Blue Origin put together an all-star team for the lander competition, partnering with Lockheed Martin, Northrop Grumman, and Draper. This “National Team” then proposed a three-stage lander that met NASA’s specifications for the Artemis program. The problem is that this proposal was expensive and sought about twice as much money as the $2.9 billion award SpaceX received.
In this proposal, Bezos made a critical error. NASA wanted to see companies self-invest in their hardware. The space agency wanted to be a customer for these landers, but not the only customer. “I think they realized it’s why they lost,” one politically connected source told Ars. “Meaning they did not invest properly.” So Bezos’ letter offers a mea culpa.
technology news Isn’t it a bit late in the game?
It sure seems so. The time to state how much skin you’re willing to put into the game is during the bidding process, not after the winners have been named.
For example, under the terms of its contract award, SpaceX will receive $2.9 billion from NASA. In return, a senior company official told Ars, SpaceX plans to invest about $6 billion to develop Starship and test the launch and landing technology news. We are already seeing this with the frenetic Starship activity in South Texas. So when NASA was selecting proposals, it knew it was getting a two-for-one return on its money.
Now, Blue Origin and Jeff Bezos have said they’re willing to self-invest. In effect, they’ve asked for a do-over.
technology news So will NASA and Congress bite?
NASA’s course on lunar lander procurement will be determined by the Government Accountability Office ruling. If the GAO dismisses Blue Origin’s protest, NASA will proceed with the award to SpaceX. With the $2.9 billion, SpaceX will develop Starship and perform a “demonstration” landing on the Moon as early as 2024. NASA has asked Congress for more money afterward to have a competition for follow-on missions. This would allow the space agency to have two lander providers, which is something pretty much everyone agrees is a good idea.
If the GAO upholds Blue Origin’s protest—which is possible but not likely—NASA would need to re-do the competition. This would put the Artemis Moon program on hold.
The real question is what Congress will do, and that seems to be the real audience for Bezos’ letter. Notably, Bezos references jobs in many congressional districts, which is the love language of legislators. NASA’s decision to select SpaceX, Bezos wrote, “also eliminated the benefits of utilizing the broad and capable supply base of the National Team (as opposed to funding the vertically integrated SpaceX approach).”
My sense is that this offer from Bezos will spur Congress to fund NASA’s idea of a Lunar Exploration Transportation Services program as an on-ramp for lunar lander vendors. Additional funding would allow NASA to buy routine astronaut transportation services throughout the Artemis program from two providers—SpaceX and Blue Origin’s National Team. We may see this funding in the final Fiscal Year 2022 budget appropriations later this year.
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technology news What’s the good World News?
It’s positive to see Jeff Bezos taking an active interest in Blue Origin and putting his immense wealth behind the company. Multiple sources told Ars that Bezos was really disconnected from Blue Origin in 2020, and that hurt the company. For one thing, the approval rating of Blue Origin Chief Executive Bob Smith is a painfully low 18 percent on Glassdoor.
With this letter, Bezos appears to be acknowledging that it was a mistake not to self-invest in the Human Landing System contract. Moreover, he is taking steps to rectify that mistake. If nothing else, that has to send a positive message to his employees.
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