Protests alleging that NASA erred in awarding a lunar landing contract to SpaceX are denied. The protesters alleged that NASA had unreasonably made only one award while intending to make two. But the solicitation’s plain terms had not committed NASA to funding two awards. The protesters asserted that NASA erred in not conducting discussions. But GAO reasoned that the solicitation expressly notified offeror that NASA would not conduct discussions. The protesters challenged the assignment of strengths and weaknesses and alleged various instances of disparate treatment and the application of unstated criteria. GAO found these arguments all meritless. GAO did find that the agency had waived a solicitation requirement for the awardee. The protesters, however, were not prejudiced by the waiver.
Background
In 2019, NASA issued the Human Landing System broad agency announcement (BAA), which set forth a multi-phased approach to demonstrate a system to land humans on the Moon. In the first, base phase, NASA planned to award several design and development contracts. In the second phase, the Option A period, NASA intended to award optional CLINs to two of the base period contractors. And in the third, Option B, phase, the agency would further develop one of the designs from the Option A period.
NASA awarded three based period contracts to Blue Origin Federal, LLC, Dynetics, Inc.-A Leidos Company, and Space Exploration Technologies Corp. (SpaceX). In October 2020, NASA released the Option A BAA to the three contractors. The BAA stated that NASA hoped to award two Option A contracts but that the number of awards would be subject to available funding. In accordance with FAR 35.016, which governs BAAs, NASA would not compare proposals or conduct a trade-off.
Blue Origin, Dynetics, and SpaceX all submitted proposals. But shortly thereafter, Congress passed a bill appropriating funds to NASA. In light of this new appropriation, NASA determined that each offeror’s proposed milestone payment now exceeded the funding available for the program. Accordingly, instead of two Option A awards, NASA made a conditional selection of only Space X for award. Space X had the lowest-proposed price by a wide margin. While its price still exceeded funding, NASA determined that it was not an “insurmountable situation.”
NASA opened post-selection negotiations with SpaceX. The company submitted a revised proposal, reducing its milestone payments to fit within NASA’s budgeting. NASA decided to make award to SpaceX without conducting further negotiations with Blue Origin or Dynetics. NASA determined that Blue Origin cold not reasonably lower its price to fit with the agency’s budget constraints. As to Dynetics, NASA found that its proposal had multiple significant weaknesses and suffered from serious drawbacks. Blue Origin and Dynetics filed protests challenging the selection of SpaceX.
Expert Consultants
Before addressing the merits of the protests, GAO addressed issues concerning the protesters’ expert witnesses. Blue Origin had wanted to use an expert who was the executive director of a nonprofit institute that competes for contracts and financial assistance from NASA. GAO had concerns with this expert because his organization competed with SpaceX for NASA funding. Blue Origin argued this was not a problem because the expert’s entity competed for basic research while SpaceX competed for applied research and development opportunities. GAO, however, was not convinced that this distinction between basic and applied research was sufficient to mitigate concerns with the expert. Consequently, Blue Origin withdrew the expert.
Dynetics proposed an professor of aerospace engineering as an expert. NASA and SpaceX objected to this expert on that grounds the expert could inadvertently disclose protected materials to students during a lecture. GAO didn’t buy it. The possibility of the expert inadvertently disclosing protected information to students was too remote to pose more than a minimal risk. What’s more, given the highly technical nature of the protest, GAO found that it would benefit from the opinions of a highly qualified professor. GAO allowed Dynetics to use the professor.
Decision to Make Single Award
Both protesters contended that NASA erred in deviating from its intention to make two Option A awards. GAO noted that NASA had planned to make two awards, the but the BAA’s plain terms did not commit the agency to making multiple awards. Indeed, it clearly advised offerors that the number of awards was contingent on funding. There was no requirement for multiple awards and thus no basis for GAO to object to the agency’s decision to make a single award.
The protesters also alleged that the decision to make a single award failed to promote competition as required by the Competition in Contracting Act. Specifically, the protesters argued, the single award of the Option A contract would create a long term non-competitive environment for future human landing system requirements and introduce long-term risk by relying solely.
But GAO reasoned that this argument misunderstood the type of competition CICA is intended to promote. The Act simply seeks to ensure full and open competition for the government’s requirements. Nothing in CICA requires the government to award multiple contracts as a matter of public policy, to foster industrial capacity, or to promote future private investment.
The protesters also contended that the reduction in funding for human landing program was a material change to the NASA’s requirement. Thus, once that agency learned that the funding would not support multiple awards, it should have disclosed this information to the offerors and sought revised proposals.
GAO found this argument meritless. NASA’ available funding for the program did not constitute a change in requirements. In fact, the solicitation and the applicable provision of FAR part 35 put offerors on notice that that any award decision was subject to available funding. Moreover, this was not an instance where the lack of funding necessitated a change in the scope, quality or amount of the government’s requirements. SpaceX had proposed to fulfill Option A’s requirements within the scope of its proposed price.
The protester complained that NASA erred in not conducting discussions with all offerors. But the Option A BAA expressly notified offerors that NASA could evaluate proposals and make award without conducting discussions or post-selection negotiations. GAO further noted that FAR part 35 does not include any provision that requires discussions. Thus, unlike a FAR part 15 procurement, there was no regulation even specifying when an agency should conduct discussions.
The protesters alleged that it was unreasonable for NASA to only engage in post-selection negotiations with SpaceX. GAO, however, noted that the protesters’ argument were based on FAR part 15. An agency conducting negotiations for a BAA is under no obligation to follow the requirements of FAR part 15. The BAA unequivocally reserved NASA’s right to engage in post-selection negotiations only with potential awardees.
Additionally, GAO reasoned, if the protesters were correct and FAR 15 principles applied, then this argument was untimely. The conduct of discussions in this case was consistent with the FAR part 35 ground rules set forth in the solicitation. If the protesters thought that the FAR 15 rules applied, they should have filed a protest before the proposal deadline.
Evaluation of Blue Origin
Blue Origin challenged some of the weaknesses assessed to its proposal. NASA assigned Blue Origin a weakness under the technical factor for its proposed guidance, navigation, and control system. NASA had identified a concern with Blue Origin’s landing vehicle because it did not appear the vehicle could land in darkness or low light situations. Blue Origin contended that NASA had applied unstated criteria, because nothing the BAA required the vehicles to be able to land in darkness.
But GAO found that being able to land in darkness was reasonably encompassed in the stated criteria. The BAA stated that the vehicle had be able to land in several conditions, including darkness and situations with limited visibility.
Blue Origin further complained that NASA unreasonably assessed a weakness with respect to the company’s data rights assertions. NASA had found that Blue Origin did not present enough evidence to support its assertions. Blue Origin argued that this was unreasonable because the agency had accepted similar data rights assertions for the initial base contract. But GAO noted that a different set evaluators had evaluated Blue Origin’s Option A contract. Individual evaluators may reasonably reach differing conclusions and assign different ratings. Absent some violation of procurement law, GAO had no basis for find that the conclusions of the new evaluators were unreasonable.
Blue Origin alleged multiple instances of disparate evaluation, complaining that its proposal had received weaknesses or significant weaknesses while SpaceX had not been assessed weaknesses and significant weaknesses for similar features in its proposal. GAO reviewed these allegations and found that the different ratings each offeror received were based on material differences in their proposals.
For instance, Blue Origin had received a weakness for the type of fuel it had selected. SpaceX had proposed to use a different type of fuel. Additionally, Blue Origin contended it had received a significant weakness because its radio communication links did not close, but SpaceX had only been assessed a weakness for similar flaw. But there were important differences between the offerors’ broken links and the extent of mitigation required to resolve the issues.
Evaluation of Dynetics
NASA had penalized Dynetics for failing to include adequate supporting information for its approach. Dynetics argued that it had actually submitted this supporting documentation to NASA during performance of the base contract. Dynetics concluded that it was unreasonable for NASA to not consider than previously submitted information.
Alas, GAO noted that the BAA repeatedly warned offerors that they could not rely on information from the base period of performance unless it was specifically incorporated into the Option A proposals. The agency was not required to rely on Dynetics’ approach to the base contract when evaluating Option A.
Dynetics asserted that NASA disparately assessed weaknesses for lack of detail. SpaceX’s proposal, Dynetics alleged, suffered from a similar lack of detail, but did not receive the same weaknesses. GAO disagreed, noting that SpaceX’s proposal included significantly more detail and nuanced analyses while Dynetics largely ignored the BAA’s admonishment to provide detailed information.
Dynetics objected to a significant weakness assessed to it uncrewed demonstration timeline. NASA assessed the significant weakness because it appeared that Dynetics would be launching critical elements for its crewed mission while still conducting uncrewed test review. Dynetics argued that any concerns NASA had about its timeline could be mitigated by moving back Dynetics’ proposed crewed flight date.
GAO found this argument unavailing. Dynetics had not proposed that it could shift is crewed flight date, and shifting approach was not what the agency evaluated. Dynetics had proposed a crewed demonstration in 2024. NASA had appropriately evaluated based on that date.
Evaluation of SpaceX
Both protesters raised several challenges to NASA’s evaluation of SpaceX. They contended that NASA relied on unstated criteria in assessing strengths to SpaceX. But GAO noted that this was procurement seeking an innovative approach under FAR part 35. There was nothing improper about the agency assessing strengths to SpaceX for innovative aspects of its approach.
The protesters alleged that SpaceX had failed to comply with a material solicitation requirement. Specifically, SpaceX’s proposal did not include mandatory flight readiness reviews for each launch as required by the BAA.
GAO agreed that SpaceX had not proposed enough flight readiness reviews. Nevertheless, GAO did not believe this error had prejudiced either of the protesters. Competitive prejudice from the waiver of a solicitation requirement exists only when (1) the requirement is similarly waived for the protester, or (2) the protester would not have been able to alter its proposal to its competitive advantage if given the opportunity to respond to the relaxed requirement.
Here, Blue Origin’s approach was so different from SpaceX’s, that the company could not reasonably establish how it would have improved its proposal with a relaxed flight readiness review requirement. As to Dynetics, GAO noted that the company had received a marginal rating under the technical factor. Even if the flight readiness requirement had been relaxed for Dynetics, it still did not have substantial chance of receiving award.
Blue Origin is represented by Scott E. Pickens, Scott N. Godes, and Matthew Michaels of Barnes & Thornburg LLP. Dynetics is represented by James J. McCullough, Michael J. Anstett, Anayansi Rodriguez, and Christopher H. Bell of Fried, Frank, Harris, Shriver & Jacobson LLP as well as Deneen J. Melander, Michael L. Waldman, Jack A. Herman, and Courtney L. Millian of Robbins, Russell, Englert, Orseck & Untereiner LLP. The intervenor, SpaceX, is represented by Kara L. Daniels, Nathaniel E. Castellano, Mark D. Colley, Thomas Petit, and Aime Joo of Arnold & Porter Kaye Scholer LLP. The agency is represented by Brian M. Stanford, Allison M. Genco, Victoria H. Kauffman, and James A. Vatne of NASA. GAO attorneys Evan D. Wesser and Edward Goldstein participated in the preparation of the decision.
