Blue Origin loses protest in bid for NASA's launch pad

Though NASA has not yet said which of two competing companies will get the contested launch pad, the news appears to be good for SpaceX and its bid to edge out its competitors in two private spaceflight markets.

The Government Accountability Office (GAO) on Thursday denied private spaceflight company Blue Origin’s protest against how NASA is handling applications to use its spare launch pad, allowing NASA to proceed in weighing which of two competing companies to award rights to the pad.

The GAO’s decision is the latest news in a bigger battle – visible behind a tense tussle over rights to a Florida launch pad – between three giants in the private spaceflight industries: Blue Origin, as well as its ally United Launch Alliance, against SpaceX.

Though the GAO’s decision does not resolve which of the companies will get the pad, since NASA’s choice is still pending, it appears to be good news for SpaceX and its bid to edge out its competitors in two private spaceflight markets.

Launch Pad 39A, at NASA’s Kennedy Space Center, has not been used since NASA scuttled its shuttle program in 2011, and the pad has since cost the space agency an annual $1.2 million in upkeep. In May 2013, in hopes of striking the pricey pad from its tab, NASA had solicited proposals from private companies to lease the facilities.

At first, billionaire Elon Musk’s SpaceX appeared to be the sole replier to NASA’s ad. In its proposal, the private venture had asked for exclusive rights to the pad, with plans to use it to launch its line of Falcon rockets and loft skyward its two big goals: to become NASA’s main vehicle supplier for trips to and from the International Space Station (ISS) and to edge its way into the private satellite launch business.

Earlier this month, Space X launched European satellite company SES S.A.’s SES-8 satellite from Cape Canaveral, Florida, in a launch widely hailed as signaling the company’s emergence into the lucrative launch business. The private satellite launch industry is worth some $6.5 billion worldwide and comes in at about $2.2 billion in the United States alone, according to the Satellite Industry Association’s 2013 report.

At the same time, SpaceX is continuing to vie with private companies Sierra Nevada and Boeing for the NASA contract to replace the space agency’s dismantled space shuttle program with a new vehicle to travel between the ISS and Earth. In 2012, SpaceX’s Dragon capsule became the first private craft to visit the station and has since made two trips there and back.

So, for SpaceX, Pad 39 would be the launch site for both these ambitions. But there was, it turned out, another bidder for NASA’s offer: Amazon.com founder Jeff Bezos’ Blue Origin had also filed an application, and its proposal was different. Blue Origin suggested arranging a multi-user lease in which it would share rights to and responsibilities for the pad with other companies.

Blue Origin appeared to have in mind as a co-leaser the United Launch Alliance (ULA), the Boeing and Lockheed Martin joint venture that has corned the US market for private satellite launches, SpaceNews reported. ULA is SpaceX’s biggest barrier to finding a foothold in the American satellite launch market.

While ULA used the pad for its satellite launches, Blue Origin planned in the meantime to continue developing its own line of suborbital capsules. Blue Origin had participated along with SpaceX in the first two stages of NASA’s challenge to replace the shuttle programs, but is not competing in the third stage, following the loss of its spacecraft during an August 2011 test flight. Blue Origin has said, though, that it will continue developing its space technologies, billing itself as the proverbial tortoise in the race for NASA contracts.  

The bid for the launch pad turned acrimonious in July, when NASA Administrator Charles Bolden alluded to a NASA preference for a single-user contract, in comments he made that also suggested that the agency was near to signing a deal on the pad. This appeared to come as a surprise to Blue Origin, which alleged that NASA’s application requirements had mislead it into assuming that NASA preferred a multi-use approach to the pad.

NASA, Blue Origin pointed out, had required applicants requesting exclusive rights to the pad to justify such a need for sole leasing rights. Applicants who proposed sharing pad rights did not have to provide a justification. Based on these desperate application requirements, Blue Origin said that NASA had showed an “inherent preference for a multi-user approach,” as the GAO put it, in its decision, and it had followed that apparent preference in filing for a multi-user lease.

NASA had replied at the time that it no preference for either kind of applicant.

But, in September, Blue Origin lodged a formal protest with the GAO against NASA’s application practices, putting off NASA’s transfer of rights to the pad until Dec. 12, when the GAO was due to release its decision.

Three weeks into the GAO’s review of the protest, SpaceX told reporters that it would open to sharing the pad with other companies, including Blue Origin. It would not have requested sole rights to the pad had it been aware that Blue Origin had also submitted a proposal, SpaceX said.

“At the time we submitted the bid, SpaceX was unaware any other parties had interest in using the pad,” SpaceX spokeswoman Emily Shankin wrote in a Sept. 20 email to SpaceNews.

Just days later, though, Mr. Musk, SpaceX's CEO, sent an email to SpaceNews that exposed a bitter battle between his company and both Blue Origin and ULA that was not just over a pad 39A, but over if there is sufficient space for all parties’ cosmic ambitions in, well, space.

“From a SpaceX standpoint, we view [Blue Origin] and [United Launch Alliance’s] action as a phony blocking tactic and an obvious one at that,” he said.

“[Blue Origin] has not yet succeeded in creating a reliable suborbital spacecraft, despite spending over 10 years in development,” he said. “If they do somehow show up in the next 5 years with a vehicle qualified to NASA’s human rating standards that can dock with the Space Station, which is what Pad 39A is meant to do, we will gladly accommodate their needs.”

“Frankly, I think we are more likely to discover unicorns dancing in the flame duct,” he said.

Musk told SpaceNews he was uncertain if Blue Origin’s “action stems from malice” – but “no such doubt exists about ULA’s motivation,” he said.

In its dismissal of Blue Origin’s protest, the GAO wrote that NASA shows “no preference for one approach versus another,” referring to the multi-user or sole user approaches.

Which of the two companies’ proposals will be selected will be “resolved based on the comparative strength of the business cases presented by the offerors,” it said.