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NASA suspends SpaceX’s $2.9 billion moon lander contract after rivals protest

NASA has suspended work on SpaceX’s new $2.9 billion lunar lander contract while a federal watchdog agency adjudicates two protests over the award, the agency said Friday.

Putting the Human Landing System (or HLS) work on hold until the GAO makes a decision on the two protests means SpaceX won’t immediately receive its first chunk of the $2.9 billion award, nor will it commence the initial talks with NASA that would normally take place at the onset of a major contract.

Elon Musk’s SpaceX was picked by NASA on April 16th to build the agency’s first human lunar lander since the Apollo program, as the agency opted to rely on just one company for a high-profile contract that many in the space industry expected to go to two companies.

As a result, two companies that were in the running for the contract, Blue Origin and Dynetics, protested NASA’s decision to the Government Accountability Office, which adjudicates bidding disputes. Blue Origin alleges the agency unfairly “moved the goalposts at the last minute” and endangered NASA’s speedy 2024 timeline by only picking SpaceX.

“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,” NASA spokeswoman Monica Witt said in a statement.

Starship, SpaceX’s fully reusable rocket system under development to eventually ferry humans and cargo to the Moon and Mars, won NASA’s award mainly for its massive cargo capability and its proposed bid of $2.9 billion — far cheaper than Blue Origin’s and Dynetics’, according to a NASA source selection document.

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Starship’s development to this point has been driven primarily by Musk, SpaceX’s billionaire founder and chief executive. The company has launched several Starship prototypes in short- and high-altitude test flights at its Boca Chica, Texas, launch facilities. Landing the prototypes after soaring over six miles in the air has proved to be a formidable challenge — all of SpaceX’s high-altitude prototype rockets have been destroyed in landing-phase explosions.

SpaceX’s private Starship development will likely continue. The company’s most recent test of a Starship prototype, SN15, is slated to launch within the next few days after clinching license approval from the Federal Aviation Administration this week.

NASA has said picking one company was the best decision it could make at the time with the funds made available from Congress. Last year, Congress gave the agency $850 million of the $3.3 billion it requested to procure two lunar landers.

SpaceX’s award was a key “first step” in a broader program to secure transportation to the Moon, NASA’s human spaceflight chief Kathy Lueders said at the time, promising that new contract opportunities will open up in the near future.