| https://www.businessinsider.com/how-spacex-beat-blue-origin-... 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. 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. 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. |
The US government has rules limiting the ability of contractors to provide the government with subsidised services. The fear is that a contractor will provide massive discounts to win the contract initially, then jack up the price once the government is locked-in. Bezos' offer to tip in $2 billion likely violates those rules.
SpaceX is contributing its own funds towards HLS Starship, but that is allowed by the rules because it can demonstrate it is a commercial investment for non-NASA customers – Starship is a generic system to meet many use non-government cases, including Starlink, commercial launch customers, and private tourism (e.g Dear Moon), and the HLS-specific aspects are a relatively small part of the overall system cost. By contrast, Blue Origin has no concrete evidence of any customer for Blue Moon except NASA, so it can't claim that its contribution is a commercial investment.