Jeff Bezos' Blue Origin satellite launch protest sustained by GAO

Blue Origin – the space venture headed by Amazon CEO Jeff Bezos – scored a small victory on Monday after the Government Accountability Office (GAO) upheld its protest of an Air Force bidding process for next generation rocket launches.

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The award was to go to two companies for numerous national security satellite launch contracts scheduled through 2027. The lucrative contracts would be split among the two winners.

The GAO determined that the basis for choosing a winner was “inconsistent with applicable procurement law and regulation” because it did not provide reasonable common basis on which offerors were expected “to compete and have their proposals evaluated.”

Blue Origin challenged the process – pre-award – in August, alleging it would create a duopoly by barring new entrants and restricting competition.

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In a statement provided to FOX Business, Blue Origin CEO Bob Smith, thanked the GAO for looking into the “serious issues.”

“This is an important mission to Blue Origin, and we remain committed to our long-term partnership with the Air Force and to working with them as they address the GAO’s recommendations,” Smith said.

According to a copy of Blue Origin’s complaint viewed by Defense News, the company had issues with multiple parts of the request for proposal. It argued the selection process – looking for the two competitors that provided the best value – was too vague. It also took issue with a provision allowing bidders to list backup launch vehicles in case a problem arose with the new rocket. That part, in particular, may appear to favor United Launch Alliance (a joint Lockheed Martin and Boeing venture) and SpaceX, both of which already have rockets certified by the Air Force.

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The Air Force awarded $2.3 billion to Blue Origin, Northrop Grumman and ULA last year to develop rockets that met its launch requirements. SpaceX filed a lawsuit after it was left out.

Winners of the satellite contract were expected to be announced in 2020. Competitors include United Launch Alliance, Elon Musk’s SpaceX and Northrop Grumman. Blue Origin’s New Glenn rocket is not expected to launch until 2021.

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United Launch Alliance was the company the Air Force turned to for years to fill these types of jobs. In 2014, SpaceX filed a lawsuit requesting to compete – and it has done so several times since.

Meanwhile, Amazon recently challenged the Pentagon over its decision to crown Microsoft the winner in the race for the winner-take-all $10 billion Joint Enterprise Defense Infrastructure (JEDI) contract.

Amazon’s cloud unit, Amazon Web Services, believes the race contained both “errors” and “unmistakable bias."

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Amazon had been considered the frontrunner due to its other standing cloud deals, including a $600 million cloud contract with the CIA. That indicates the company already has the approval to handle sensitive government data. The company, however, got drawn up in public controversy.