NASA Suspends HLS Contract With SpaceX

NASA Suspends HLS Contract With SpaceX

NASA has suspended its contract with SpaceX for the landing system to take astronauts down to and back from the lunar surface.  Two other competitors for the contract, Blue Origin and Dynetics, have filed protests with the Government Accountability Office (GAO) and NASA issued the stop work order until GAO resolves the matter.

NASA awarded 10-month contracts to three companies one year ago today to further develop their concepts for Human Landing Systems (HLS) as part of the Artemis program to return astronauts to the lunar surface: SpaceX, Dynetics, and Blue Origin’s “National Team” that includes Lockheed Martin, Northrop Grumman and Draper.

NASA’s Space Launch System (SLS) rocket and Orion spacecraft will take crews to lunar orbit, but they will finish the journey using HLS.

Two weeks ago, NASA chose SpaceX to proceed into development, awarding it a $2.99 billion fixed price contract.  It is only for the first Artemis landing and a precursor uncrewed flight test. NASA is issuing a separate solicitation for landing systems for future missions.

On Monday, Blue Origin and Dynetics each filed protests with GAO asserting NASA’s selection process was flawed.

NASA now has told SpaceX to stop work until GAO determines the outcome.  A NASA spokesperson provided this statement to this afternoon.

“Pursuant to the GAO protests, NASA instructed SpaceX that progress on the HLS contract has been suspended until GAO resolves all outstanding litigation related to this procurement.”

The issuance of the stop work order was first reported by Space News.

GAO has 100 days — until August 4, 2021 — to make a decision.

SpaceX is already testing prototypes of its Starship system using its own funds. A number of tests have been conducted at its Starbase test site in Boca Chica, TX. Starship is designed to be reusable so it not only launches, but lands. All four of the last four tests of its three-engine prototypes have launched and flown well, but the landings resulted in spectacular explosions. SpaceX views these failures as learning experiences and simply moves on to the next prototype. The stop-work order may not have much effect since these tests were planned before the contract award. The next is expected imminently.

NASA earlier had insisted it wanted to pick two winners, not one, to ensure redundancy. Its decision in favor of only SpaceX caught everyone by surprise.

NASA’s Source Selection Statement (SSS) explained it simply did not have enough money to proceed with two. For FY2021, Congress appropriated just 25 percent ($850 million) of the $3.4 billion NASA requested for HLS. The SSS said the agency barely had enough for SpaceX’s bid, which was the lowest, adding that it had gone back to SpaceX to ask for a best and final offer, but not the other two companies. SpaceX did not change its price, but did modify when payments are due.

Blue Origin made a redacted version of its protest available on Monday listing the reasons for its protest.  One theme is that the funding shortfall changed NASA’s requirements and all offerors should have had a chance to revisit their bids.

Dynetics also made a redacted copy of its protest available several days after it was filed. Among its claims, Dynetics says NASA “apparently abandoned the fundamental ground rules it had established for this program” because of the funding shortfall, which made the program as envisioned “no longer executable.” Therefore NASA should have amended the solicitation to reflect the new budget outlook, opened discussions with the offerors and allowed them to resubmit their proposals, or withdrawn or cancelled the solicitation entirely and started again.

Both companies also argued that NASA’s evaluation of their proposals on their merits was flawed. NASA ranked the proposals on three factors: technical, price, and management approach. SpaceX came in first, Blue Origin second, and Dynetics third.

The SSS disclosed only SpaceX’s price, $2.99 billion, adding that Blue Origin’s was significantly higher than SpaceX’s, and Dynetics’ was significantly higher than Blue Origin’s.

On Monday when it filed its protest, Blue Origin revealed its price was $5.99 billion. Dynetics has not shared its bid.

The Trump Administration directed NASA to put astronauts back on the Moon by 2024. The Biden Administration supports Artemis, but has not indicated what time frame it has in mind. Many are skeptical that 2024 is achievable technically or budgetarily, but current NASA officials and incoming NASA Administrator Bill Nelson maintain it is a possibility. Even some Senators at Nelson’s confirmation hearing pushed for that date even though it was Congress that drastically cut the HLS funding last year making such a timeline even less credible.

Hopefully the Biden Administration will lay out its plan in the near future as Congress begins consideration of the FY2022 budget request. The Administration proposed a 6.3 percent increase for NASA, a total of $24.7 billion of which $6.9 billion is for Artemis. That is $325 million more than what Congress appropriated last year, but far less than Trump Administration projections last year of would be needed to get American boots on the Moon in 2024.


This article was updated May 3, 2021 after Dynetics provided us with a redacted copy of its protest.

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