Tuesday, July 27, 2021

It Looks Like Bezos Is Going to Try...

Try what?  Last Wednesday, the day after Jeff Bezos' suborbital flight, Eric Berger at Ars Technica wondered aloud if Bezos was still "all-in" on the company's mission and going to try to turn it around,  

So after he returned from his spaceflight on Tuesday, what I most wanted to know is whether Jeff Bezos is all-in on space. He has the vision. He has the money. But at the age of 57, does he have enough years or willingness to ensure Blue Origin’s success? Or will he leave Blue Origin to flounder and instead mostly retire to his half-billion-dollar yacht after a suborbital joyride?

This week, it's (at least) starting to look like he's going to try to save Blue Origin.   

Jeff Bezos published an open letter to NASA Administrator Bill Nelson on Monday morning and offered to pay more than $2 billion to get the agency's Human Landing System program "back on track." In effect, the founder of Blue Origin and world's richest person says he will self-invest in a lunar lander because NASA does not have the money to do so.

NASA's Artemis program aspires to land humans on the Moon by 2024 and establish a sustainable settlement on the surface. As part of this project, the agency is seeking reusable, affordable transportation to the Moon and back. It conducted a competition for a human lander (HLS) and announced in April that it would move forward with SpaceX and its Starship proposal. NASA had wanted two providers for such a lander, but due to low appropriations from Congress, it could afford only one.

At the end of April '20, NASA selected three contractors to begin initial development of lunar landing systems to take astronauts back to the surface of the Moon by 2024.  The three teams and their contracts were the Blue Origin "National Team" of big names in aerospace with a $579 million dollar contract, Dynetics with a $253 million contract, and SpaceX with a $135 million contract. This April, NASA downselected from three to just SpaceX as sole provider of the lunar landing system. They had previously said they were going to select two providers but congress had cut their budget too much.

For the current fiscal year, NASA said it needed $3.3 billion in funding to meet the goal of landing humans on the Moon by 2024. Congress provided just $850 million, and as a result, NASA acknowledged that 2024 was no longer a realistic target.

Within two weeks of that announcement, Blue Origin filed a protest of the contract award to SpaceX; BO described the award as "flawed," adding that NASA "moved the goalposts at the last minute."  We covered here in late May that BO's next tactic was to lobby their local (Washington) US senator, Maria Cantwell  to add $10 billion to NASA's budget to pay for BO's lander.  That almost worked.  The Senate passed the addition, but the House said no, and that tactic seems to have died.  

Eric Berger at Ars Technica points this out:

Blue Origin put together an all-star team for the lander competition, partnering with Lockheed Martin, Northrop Grumman, and Draper. This "National Team" then proposed a three-stage lander that met NASA's specifications for the Artemis program. The problem is that this proposal was expensive and sought about twice as much money as the $2.9 billion award SpaceX received.

In this proposal, Bezos made a critical error. NASA wanted to see companies self-invest in their hardware. The space agency wanted to be a customer for these landers, but not the only customer. "I think they realized it's why they lost," one politically connected source told Ars. "Meaning they did not invest properly." So Bezos' letter offers a mea culpa. [BOLD added: SiG]

The point that nobody mentions when they say, "SpaceX got almost $3 billion from NASA" is that SpaceX told NASA they were investing $6 billion of their own money to get Starship working.  That means that when NASA selected SpaceX they were getting twice as much for their investment, 2 to 1 on their money.  BO's National Team wasn't putting up any of their own money that we know of, so NASA was getting nothing for their money other than what was on the contracts.  

I can't help but think that NASA was thinking of the National Team as the standard "old space" businesses that are running the perennially late and over budget Space Launch System, and went with "New Space" that has time after time been doing things that "they say couldn't be done" at speeds observers are constantly surprised by.  I'd go so far as to say SpaceX gave the impression that the contract was a nice way to develop a version of Starship they intended to develop anyway and, in turn, they'd get some of the knowledge NASA has acquired over the years.  Otherwise they're funding Starship themselves.  

Eric Berger points out that the letter may be more addressed to the in-house readers at BO itself; Bezos is telling them he's back and taking charge.

Multiple sources told Ars that Bezos was really disconnected from Blue Origin in 2020, and that hurt the company. For one thing, the approval rating of Blue Origin Chief Executive Bob Smith is a painfully low 18 percent on Glassdoor.

With this letter, Bezos appears to be acknowledging that it was a mistake not to self-invest in the Human Landing System contract. Moreover, he is taking steps to rectify that mistake. If nothing else, that has to send a positive message to his employees.

Jeff Bezos in blue flight suit and white cowboy hat walks with CEO Bob Smith in the black ball cap after last week's suborbital flight. Joe Raedle/Getty Images 




  1. Nice try, but there's little to no chance they'll get the BE4 space certified and launched before the "Must be made in the USA" deadline comes around, leaving both New Glenn and ULA's Vulcan out of luck.

    And Blue Origin is still doing the whole "we're building it just like legacy aerospace" manufacturing, rather than doing it out in the open like SpaceX.

    Though, interestingly, Musk tweeted earlier (sometime in the last 4-5 days) that they'll be building a newer, larger and higher High Bay assembly (because the existing High Bay just barely is tall enough to make Boosters. So SpaceX is already openly talking about expanding their manufacturing footprint at Starbase.

    Heh. Bezos says "I'll get more involved in BO." Musk says "We're expanding SpaceX. And with our own money."

    Guess which one will win, as long as Congress stays out of it?

  2. "reusable, affordable transportation to the Moon and back."
    I think I just heard a whole bunch of engineere take a step back.

  3. Wonder if Elon wants to be on the test run?

    Now that would be Must See TV.

  4. Bezos' "open letter" is a contract negotiating ploy only. The "open letter" is not addressed to employees, is not indicative of "taking charge", does not "send a positive message to his employees", does not acknowledge any Blue Origin shortcomings nor indicate any corporate personnel or policy changes. Bezos approved a contract price reduction, that is all.