Here’s why government officials rejected Jeff Bezos’ claims of ‘unfair’ treatment and awarded a NASA contract to SpaceX over Blue Origin

Jeff Bezos Elon Musk space
  • The GAO released a takedown of Jeff Bezos' complaints against NASA's selection of SpaceX.
  • Blue Origin accused NASA of favoritism toward Elon Musk's company.
  • The GAO report found that SpaceX's design beat out Blue Origin's proposal at every level.
  • See more stories on Insider's business page.

SpaceX was selected over Blue Origin for a NASA contract to take humans back to the moon, and a new report from government officials highlights exactly why.

Last month, Jeff Bezos filed a complaint against NASA, calling its decision to select SpaceX for its Human Landing System Program "unfair." Bezos even offered to cover up to $2 billion in costs for the mission to help Blue Origin compete with SpaceX's $2.9 billion offer, but it was not enough to sway NASA.

When SpaceX was chosen in April it came as a surprise, as NASA had originally selected three companies (SpaceX, Blue Origin, and Dynetics) to create proposals for a lunar landing system that could bring astronauts back to the moon by 2024. When the competition was announced, NASA had indicated that it would choose two proposals but ended up leaving Blue Origin and Dynetics in a lurch.

The US Government Accountability Office (GAO) reviewed Bezos' complaint, which was filed alongside Dynetics and rejected the protest. In a public report, the GAO laid out why Elon Musk's company was chosen over Blue Origin.

Here are a few key responses from the GAO takedown of Bezos' complaints against NASA:

Blue Origin hinged its complaint around the fact that NASA had promised to select two companies

Bezos said in a letter following the complaint that NASA risked compromising the mission by eliminating the element of "competition."

In response, the GAO pointed to NASA's limited funds for the mission. The group even took a stab at Blue Origin, saying NASA was not "required" to choose an applicant whose proposal NASA did not find attractive. In other words, NASA was not forced to take on two companies if it only found one company up to par.

The GAO then broke down how SpaceX's proposal compared to Blue Origin based on NASA's analysis. Each proposal was graded on technology, management, and price. The technical aspects were found to be most important in NASA's analysis, followed by price, and management.

NASA graded each company's proposal based on whether its strengths outweighed its weaknesses, grading each level of weakness or strength based on a scale of how much it would impact the overall mission. For example, both SpaceX and Blue Origin's communication systems were graded as weak, but Blue Origin's received a "significant weakness" for having less systems that were effective.

"Even assuming a comparative analysis was required, SpaceX's proposal appeared to be the highest-rated under each of the three enumerated evaluation criteria as well as the lowest priced," the GAO said.

Despite Bezos' offer to lower Blue Origin's $5.9 billion contract and take on $2 billion out-of-pocket, the GAO said NASA had found it "implausible" that the company could reduce its price without significantly changing its design.

Blue Origin complained the decision showed favoritism to SpaceX

Bezos said NASA had unfairly evaluated Blue Origin. For example, the company argued that it was not specified that the vehicle should be able to land in the dark. The GAO contended that NASA was not required to lay out all minute details, and Blue Origin should take into account the conditions on the moon or space itself - which is dark.

Blue Origin also raised issue with the fact that SpaceX received extra points for developing a system that focused on the health and safety of the crew - an objective that NASA had not made a requirement. The GAO said NASA had the freedom to choose which design function to prioritize.

Here's how the two companies' proposals stacked up, according to NASA

SpaceX

  1. Technical: 3 significant strengths; 10 strengths; 6 weaknesses; and 1 significant weakness
  2. Price: $2.9 billion
  3. Management: 2 significant strengths; 3 strengths; and 2 weaknesses

Blue Origin

  1. Technical: 13 strengths; 14 weaknesses; and 2 significant weaknesses
  2. Price: $5.9 billion
  3. Management: 1 significant strength; 2 strengths; and 6 weaknesses
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