NASA Slaps Jeff Bezos, Blue Origin With Harsh Reality Over Lawsuit: 'Blue Origin Made a Bet and It Lost'

The reason behind NASA's decision to turn down Blue Origin is finally revealed. NASA called out all of Blue Origin's lawsuits and complaints, saying the company gambled and lost.

In summary, Blue Origin "gambled" its Moon lander proposal of $5.9 billion, fully expecting NASA to negotiate its price. Despite being "able and willing" to offer it at a lower price, Blue Origin pressed NASA with more funding than it could afford.

Sources from The Verge recently got hold of the NASA-Blue Origin legal filings in court. These documents reveal the harsh reality of Blue Origin's contract loss.

Blue Origin Made a Bet Against NASA: The Truth Behind $5.9 Billion Offer

According to NASA attorneys, Blue Origin must have gotten its confidence from the development contracts provided in April 2020. All three chosen bidders: Blue Origin, SpaceX, and Dynetics received development funding for the program's initial phase. SpaceX got $135 million, Dynetics got $253 million, and Blue Origin got $579 million.

Blue Origin initially proposed $879 million on the development contracts. However, when NASA requested a meeting to negotiate, Blue Origin offered a $300 million discount, dropping the price to $579 million.

NASA attorneys argued the same tactic was applied on the Blue Origin Moon Lander, citing a six-page declaration written by senior vice president Brent Sherwood. Sherwood said NASA "did not afford Blue Origin, a well-funded private space company backed by Jeff Bezos, any opportunity to submit a revised business position."

NASA emphasized that companies were all instructed to submit their best proposals first.

NASA attorneys brutally summarized Blue Origin's stand in a statement, saying: "(Blue Origin) made an assumption about the Agency's HLS budget, built its proposal with this figure in mind, and also separately made a calculated bet that if NASA could not afford Blue Origin's initially-proposed price, the Agency would select Blue Origin for award and engage in post-selection negotiations to allow Blue Origin to lower its price. All of these assumptions were incorrect."

This concluded with nothing but losses on Blue Origin's side.

NASA Awards SpaceX Lunar Lander Contract

Costing only half of Blue Origin's budget, NASA made their decision to accept SpaceX's proposal instead. NASA mentioned seven previous circumstances where its award decision to pick one or two companies was also based on their funding from the Congress.

It is worth noting that Blue Origin's protest was not a complete failure. The company pointed out that NASA gave SpaceX an unfair advantage to "waive" requirements on government safety reviews.

Nonetheless, the Government Accountability Office (GAO) ultimately sided with NASA, saying that Blue Origin failed to prove their prejudice claims.

In a post-interview with The Verge, Blue Origin vice president of government relations Megan Mitchell said, "I wouldn't say that we didn't offer our best offer when we put in our proposal ... I think we did give a great offer, I'm not going to comment on NASA characterizing it as gambling - we disagree with that."