In a surprise decision, Jeff Bezos space venture Blue Origin lost a $2.9 billion contract to build a lunar lander for NASA to rival SpaceX in April. That's the bad news for Blue Origin, which had asked NASA to pay it $5.9 billion for the work.
The good news is that while Blue Origin might not get $5.9 billion, it might get $26.5 million instead.
(On second thought, that might also be pretty bad news.)
1 out of 200 ain't bad?
NASA's consolation prize for Blue Origin -- funding to help the company develop new versions of a Human Landing System (HLS) for later visits to the moon -- amounts to less than 0.5%, or 1/200th, of what Blue Origin initially asked for to build the HLS prototype. It's a relative pittance.
It's also only one of five contracts that NASA handed out last month to space companies submitting plans for future iterations of HLS. In addition to Blue Origin, NASA awarded:
- $40.8 million to Dynetics, now owned by Leidos (LDOS 0.27%), as S&P Global Market Intelligence confirms;
- $35.2 million to Lockheed Martin (LMT -0.31%);
- $34.8 million to Northrop Grumman (NOC -0.56%); and
- $9.4 million to SpaceX -- on top of the $2.9 billion payday the company will receive for building the original HLS.
Even taken in total, the $146 million in contracts NASA awarded last month pale in comparison to the $2.9 billion SpaceX has already won. But that doesn't mean that these contracts are irrelevant.
The first might not be the last
There's no question SpaceX won a PR coup -- as well as a big payday -- when NASA passed over rival bids from Leidos and Blue Origin and chose SpaceX to conduct its "initial crewed demonstration mission" to the moon. That being said, SpaceX's first moon trip won't be NASA's last.
Far from it.
In fact, NASA says a "major goal" of the Artemis project is to establish "a long-term human presence on the Moon through recurring services using lunar landers." Over the years and decades to come, the space agency intends to set up a system "to provide regular astronaut transportation from lunar orbit to the surface of the Moon" -- meaning multiple trips, multiple contracts, and probably multiple billions of dollars to be earned by the companies that help NASA accomplish its goals.
As the first company to win an HLS contract, SpaceX will surely be part of that future. Still, that doesn't mean that Leidos, Lockheed Martin, Northrop Grumman -- and yes, Blue Origin too -- won't have roles to fill, whether that means building human landers or robotic landers designed to carry cargo, extracting raw materials from the moon for building base camps and fueling spaceships, or other missions yet to be thought up. Ultimately, NASA says it favors "partnering with [multiple] innovative U.S. companies [to] establish a robust lunar economy while exploring new areas of the Moon for generations to come."
Blue Origin could well be one of those companies.
The bigger risk for Blue Origin
The problem is that at the same time as NASA reassures its contractors that the April HLS award was not a "one and done" thing (so to speak), and that there will be plenty more business to go around in the future, Blue Origin seems intent on sabotaging its relationship with the space agency. Last month, Blue Origin sued NASA in federal court, demanding that SpaceX's HLS contract be rescinded, the awards process reopened, and Blue Origin given an opportunity to revise its bid.
Judges permitting, this lawsuit could perhaps result in a win for Blue Origin, and a contract worth the initial $5.9 billion it sought, or the $2.9 billion awarded to SpaceX, or something in between -- or it could not. Blue Origin could end up right back where it started, with no contract, and a now-annoyed NASA wondering whether it really wants to work with a bad loser in the future.
Worse than that, Blue Origin's lawsuit now makes SpaceX -- and Lockheed, Northrop, and Dynetics, too -- look like "the good guys" in any future competitions for lunar work, because they at least aren't suing the agency that hands out all the contracts. The better choice, it seems to me, would be for Blue Origin to accept the olive branch NASA has offered it, and live to bid another day.