Opinion

Blue Origin Federation, LLC v. United States

Court: United States Court of Federal Claims
Filed: Nov 18, 2021
Status: Published
On the bench: Richard A. Hertling
Cited by: 0 cases
Authority: More cited than 22.0%

“If an ambiguity is obvious and a bidder fails to inquire with regard to the provision, his interpretation will fail.”

How later courts described this case

“If an ambiguity is obvious and a bidder fails to inquire with regard to the provision, his interpretation will fail.”
requiring success on the merits as the first consideration in deciding whether to issue a permanent injunction
“If a solicitation contains contract language that is patently ambiguous, a protestor cannot argue . . . that its interpretation is proper unless the protestor sought clarification of the language from the agency before the end of the procurement process.”
finding that there was no connection between the government’s error and the protestor’s failure to secure the contract

Written by the judges who cited it.

The opinion

In the United States Court of Federal Claims

No. 21-1695C

Filed: November 4, 2021

Reissued: November 18, 2021 *

FOR PUBLICATION

BLUE ORIGIN FEDERATION, LLC,

Plaintiff,

UNITED STATES,

Defendant,

and

SPACE EXPLORATION

TECHNOLOGIES CORP.,

Defendant–Intervenor.

Scott E. Pickens, Barnes & Thornburg LLP, Washington, D.C., for the plaintiff, with Scott N.

Godes and Matthew J. Michaels, of counsel.

Anthony F. Schiavetti, Commercial Litigation Branch, Civil Division, U.S. Department of

Justice, Washington, D.C., for the defendant, with Allison M. Genco and Brian M. Stanford,

Office of the General Counsel, National Aeronautics and Space Administration, of counsel.

Kara L. Daniels, Arnold & Porter Kaye Scholer LLP, Washington, D.C., for the defendant–

intervenor, with Mark D. Colley, Nathaniel E. Castellano, Thomas A. Pettit, and Aime JH Joo, of

counsel.

MEMORANDUM OPINION

HERTLING, Judge

In this post-award bid protest, the plaintiff, Blue Origin Federation, LLC (“Blue Origin”),

challenges a contract award pursuant to a solicitation under a Broad Agency Announcement

*Pursuant to

the protective order in this case, the Court initially filed this opinion under seal

on November 4, 2021 and directed the parties to propose redactions of confidential or proprietary

information by November 18, 2021. The parties have jointly submitted to the Court proposed

redactions. (ECF 76.) The Court adopts those redactions, as reflected in this public version of

the opinion. Redactions are denoted with three asterisks in square brackets, [***].

(“BAA”) issued by the National Aeronautics and Space Administration (“NASA”). Under its

Artemis Program, NASA seeks to develop a Human Landing System (“HLS”) through public –

private partnerships for the United States to return to the moon. The solicitation at issue was the

second phase of those efforts. NASA awarded the contract to Space Exploration Technologies

Corp. (“SpaceX”). The defendants are the United States, acting through NASA, and SpaceX,

which intervened to defend its contract award.

In its complaint, Blue Origin alleges that NASA (1) waived material solicitation

requirements for SpaceX; (2) conducted unequal discussions; (3) failed to amend the solicitation

when NASA received less funding than anticipated; (4) improperly evaluated offerors’ technical

ratings; and (5) breached the implied contract of good faith and fair dealing. Blue Origin alleges

that it would have submitted an alternative proposal if it had known that NASA would waive

certain requirements of the solicitation. Blue Origin has moved for judgment on the

administrative record under Rule 52.1 of the Rules of the Court of Federal Claims (“RCFC”).

The United States has moved to dismiss either under RCFC 12(b)(1) for lack of subject-

matter jurisdiction or, in the alternative, under RCFC 12(b)(6) f or failure to state a claim upon

which relief can be granted. The defendant argues that Blue Origin does not have standing to

bring its challenge because Blue Origin did not have a substantial chance of award, even

assuming its allegations were true, and Blue Origin’s alternative proposal is speculative.

Alternatively, the government argues that Blue Origin’s first three claims were waived by failing

to raise the issues before the close of bidding. SpaceX supports the defendant’s motion to

dismiss.

The government and SpaceX have also both cross-moved for judgment on the

administrative record. They argue that NASA did not waive solicitation requirements, and that

NASA acted properly within its discretion under the solicitation and procurement law. The

government and SpaceX argue that, even if the Court finds that NASA acted improperly, Blue

Origin could not have been prejudiced.

The Court finds that Blue Origin does not have standing because it did not have a

substantial chance of award but for the alleged evaluation errors. Its proposal was priced well

above NASA’s available funding and was itself noncompliant. Blue Origin argues that it would

have submitted an alternative proposal, but the Court finds its hypothetical proposal to be

speculative and unsupported by the record. The Court also finds that several of Blue Origin’s

objections are waived.

Even if Blue Origin had standing and its objections were not waived, the Court finds that

it would lose on the merits. Blue Origin has not shown that NASA’s evaluation or its conduct

during the procurement was arbitrary and capricious or otherwise contrary to law. NASA

provided a thorough, reasoned evaluation of the proposals, and NASA’s conduct throughout the

procurement process was not contrary to law.

Accordingly, the Court grants the government’s motion to dismiss and for judgment on

the administrative record and SpaceX’s motion for judgment on the administrative record . Blue

Origin’s motion for judgment on the administrative record is denied.

I. BACKGROUND

The “Moon plan” under NASA’s Artemis Program is “focused on achieving the goal of

an initial human landing [on the moon] by 2024 with acceptable technical risks, while

simultaneously working toward sustainable lunar exploration in the mid - to late 2020s.” NASA,

NASA’s Lunar Exploration Program Overview 9 (Sept. 2020), available at

https://www.nasa.gov/sites/default/files/atoms/files/artemis_plan-20200921.pdf. To that end,

NASA began a multi-phase HLS procurement, which started with base-period contracts. The

plan follows the base period with a follow-on “Option A” solicitation, which is at issue in this

case. (AR Tab 49 at 62409-10.)

A. HLS Base-Period Contract

For the base-period contracts, NASA solicited proposals for the HLS procurement under

Appendix H of a BAA titled “Next Space Technologies for Exploration Partnerships-2

(NextSTEP-2).”1 (AR Tab 28 at 33228; AR Tab 108a-002.) NASA awarded base-period

contracts to Blue Origin, SpaceX, and Dynetics, Inc. (AR Tab 77 at 63038.)

During the base period, each contractor was enabled to develop a preliminary design of

its proposed landing system. (See AR Tab 49 at 62409.) During the base period, NASA

“dispositioned and approved the final list of standards uniquely applicable to [each] Contractor’s

adjusted proposal for Option A.” (AR Tab 27 at 24443.) The three base-period contractors were

each required to “use these standards in preparing [their] Option A proposal[s].” (Id.) NASA’s

intent was “to transition between the Base period and Option A period without any break in

contractor performance.” (Id. at 24429.)

B. HLS Option A Solicitation

While the three base-period contractors were performing under their contracts, NASA

solicited proposals from those contractors for the next phase of the HLS procurement:

“Option A.” (AR Tab 27.) Only the three awardees of base-period contracts could submit

proposals under the Option A solicitation.

The solicitation consisted of the HLS Appendix H Option A solicitation, as amended; the

NextSTEP-2 BAA; and attachments A through Q to the solicitation. (See id. at 24434-36.) The

solicitation contemplated the award of a firm fixed-price contract. (Id. at 24432.)

Federal Acquisition Regulation (“FAR”) 35.016, which governs BAAs, provides that

“BAAs may be used by agencies to fulfill their requirements for scientific study and

experimentation directed toward advancing the state-of-the-art or increasing knowledge or

understanding rather than focusing on a specific system or hardware solution.” FAR 35.016(a).

1. Structure

The HLS Option A solicitation was conducted “as an ‘other competitive procedure’ in

accordance with FAR 6.102(d)(2) and FAR 35.016 (as deviated).” (Id. at 24473.) A Source

Evaluation Panel (“SEP”) was responsible for evaluating proposals and presenting the results to

the Source Selection Authority (“SSA”). (Id. at 24480.) The SEP was comprised of NASA

subject-matter experts. Three distinct panels were established to review different aspects of the

proposals: a technical-evaluation panel, price-evaluation panel, and management-evaluation

panel. After the SEP submitted its evaluations to the SSA, the SSA was “responsible for making

selections and final contract award decisions based on applying the evaluation, selection, and

award methodology as described in [the Option A] solicitation.” (Id.)

The solicitation explained that NASA would “not conduct a comparative analysis and

trade-off” among proposals. (Id. at 24473.) Instead, the SSA would “consider each proposal on

its own individual merits, and [would] select for award one or more proposals that individually

each present value to the Government and that optimize NASA’s ability to meet its objectives as

set forth in [the Option A] solicitation.” (Id. at 24480.)

The number of awards NASA would make depended on “funding availability and

evaluation results.” (Id. at 24481.) Although NASA preferred to award two contracts, “NASA

reserve[d] the right to change its HLS acquisition strategy at any time.” (Id. at 24429.) The

solicitation noted that “[f]unds are not currently available for this solicitation, but are expected to

become available on or before contract award.” (Id. at 24481.) The solicitation expressly noted

that awards were contingent on those funds becoming available: “The Government’s obligation

to make awards is contingent upon the availability of appropriated funds from which payments

can be made and the receipt of proposals that NASA determines are acceptable.” (Id.)

Consistent with this funding contingency, “NASA reserve[d] the right to select for award

multiple, one, or none of the proposals received . . . .” (Id.)

NASA also reserved “the right to conduct post-selection negotiations or discussions if the

Contracting Officer later determines them to be necessary.” (Id. at 24433.) The solicitation gave

the SSA the authority to “make initial, non-binding selections of an Offeror or Offerors for the

purpose of having the Contracting Officer engage in post-selection negotiations with one or more

Offerors as defined in [the Option A] solicitation.” (Id. at 24480.) The solicitation further

reserved to NASA “the right to negotiate any aspect of an Offeror’s milestone payment a mounts,

schedule, and/or acceptance criteria prior to award of Option A.” (Id. at 24467.)

Under the solicitation, timing is the only difference between post-selection negotiations

and discussions. “Post-selection negotiations” are defined in the solicitation as “exchanges with

Offerors who have been selected for potential contract award that result in the Contracting

Officer inviting the Offeror to revise only those specific portions of its proposal that have been

identified by the Contracting Officer as open to revision.” (Id. at 24434.) “Discussions” are

defined as “exchanges with Offerors that occur after receipt of proposals but before selection that

result in the Contracting Officer inviting the Offeror to revise only those specific portions of its

proposal that have been identified by the Contracting Officer as open to revision.” (Id.) A

“‘[p]roposal revision’ is any change made by the Offeror to its proposal that occurs as a result of

discussion or post-selection negotiations . . . .” (Id.)

In bold-faced type, the solicitation provided that “[t]he Government may evaluate

proposals and award contracts without conducting post-selection negotiations or discussions with

Offerors . . . .” (Id. at 24433 (bold omitted).) As a result, the solicitation directed that “each

Offeror . . . submit only one proposal which represents its best approach to meeting the

requirements of the solicitation.” (Id.)

2. Evaluation Criteria

The solicitation designated three evaluation factors: Technical Approach, Total Evaluated

Price, and Management Approach. (Id. at 24475.) The technical approach was more important

than the total evaluated price, which was more important than the management approach. (Id.)

The technical approach and management approach, when combined, were “significantly more

important” than the total evaluated price. (Id.)

As further guidance for the technical-approach and management-approach factors, the

solicitation provided “areas of focus.” (Id.) The areas of focus (each “approximately of equal

importance within their respective Factor”) were to be “considered in totality to arrive at a single

adjectival rating for each factor.” (Id.) The adjectival ratings consisted of Outstanding, Very

Good, Acceptable, Marginal, and Unacceptable. (Id. at 24477.)

Regarding the technical-approach and management-approach factors, NASA would also

identify and evaluate specific strengths and weaknesses of each proposal. (Id. at 24476.) For

these purposes, NASA would “consider how an Offeror’s proposed approach affects risk, such as

technical risk, risk to meeting the Offeror’s proposed schedule, the need for increased

Government oversight, or the risk of likelihood of unsuccessful contract performance.” (Id.)

The solicitation listed five categories of strengths and weaknesses: Significant Strength,

Strength, Weakness, Significant Weakness, and Deficiency. (Id.) Relevant here, “Weakness”

was defined as “[a] flaw in the proposal that increases the risk of unsuccessful contract

performance.” (Id.) “Deficiency” was defined as “[a] material failure of a proposal to meet a

Government requirement or a combination of significant weaknesses in a proposal that increases

the risk of unsuccessful contract performance to an unacceptable level.” (Id.)

The solicitation notified offerors that “proposals evaluated as having one or more

deficiencies are unawardable,” and that NASA reserved the right to exclude from discussions or

negotiations the offerors whose proposals were identified as having one or more deficie ncies.

(Id. at 24480.)

3. Statement of Work

The Statement of Work (“SOW”), Attachment G to the solicitation, described the work to

be performed under the HLS Option A contract. (AR Tab 27e.) The SOW was common to all

offerors and described, among other topics, “major milestone reviews for the HLS Program in

order to be able to assess programmatic and technical progress and performance at key decision

points in the development and operational lifecycle phases . . . .” (Id. at 32965.) The NASA-led

critical-milestone reviews included the Flight Readiness Review(s) (“FRR”) and the Design

Certification Review (“DCR”). (Id. at 32965-66.)

The FRR is the first critical-milestone review at issue in this case. The FRR has two

objectives. First, it “examines tests, demonstrations, analyses, and audits that determine the

system’s readiness for a safe and successful flight or launch and for subsequent flight

operations.” (Id. at 32972.) Second, it “ensures that all flight and ground hardware, software,

personnel, and procedures are operationally ready.” (Id.) The FRR Acceptance Criteria include

certification that “[t]he flight vehicle, launch vehicle, and support spacecraft (such as propellant

storage, propellant transfer, and/or upper stage vehicles that provide transportation capabilities

beyond the standard for orbit insertion) are ready for flight.” (Id.) The SOW provided that

“[t]he FRR should be completed by two (2) weeks before launch of each HLS element.” (Id.)

The Milestone Acceptance Criteria and Payment Schedule, Attachment O to the solicitation,

phrased the FRR as a requirement: “An FRR is required prior to each launch of an HLS

element.” (AR Tab 27k at 33187.)

The DCR is the second critical-milestone review at issue in this case. This review

“ensures that the qualification and verifications demonstrate design compliance with the

functional and performance requirements and human spaceflight certification.” (AR Tab 27e at

32969.) The SOW provides that the DCR “should be completed at first HLS launch – 9 Months

(L-9).” (Id.) The Milestone Acceptance Criteria and Payment Schedule clarified that the DCR

was to be scheduled “9 months before first HLS element launch (L-9 months).” (AR Tab 27k at

33187 (emphasis added).)

Both the FRR and the DCR were to be conducted for an “HLS element.” Although the

SOW did not define “HLS element,” it did define “HLS”:

HLS: All objects, vehicles, elements, integrated systems, systems,

subsystems, or components thereof that are designed, developed,

and utilized by the contractor, its teammates, subcontractors, and

suppliers in performance of this contract, and which collectively

comprise the contractor’s Integrated Lander (or elements thereof),

all Supporting Spacecraft, all launch vehicles necessary for launch

and delivery of the contractor’s Integrated Lander (or elements

thereof) and its Supporting Spacecraft, and the contractor’s Active-

Active docking adapter . . . (if required for performance of the

contractor’s crewed demonstration mission).

(AR Tab 27e at 32948 (bold in original).) The parties disagree about how to read this definition

together with other provisions of the SOW to interpret “HLS element.”

C. Source Selection and Award

1. Proposals and Evaluations

Each of the three base-period contractors—Blue Origin, SpaceX, and Dynetics—

submitted a timely proposal in response to the HLS Option A solicitation. (AR Tab 77 at 63038-

39.) Blue Origin’s Total Evaluated Price was about $6 billion, and Dynetics’ Total Evaluated

Price was about $9 billion. (AR Tab 61 at 62856, 62866.) As the SSA noted in her summary of

the SEP’s evaluation results, “SpaceX’s Total Evaluated Price of $2,941,394,557 was the lowest

among the offerors by a wide margin.” (AR Tab 77 at 63044.) Although the prices varied, the

SSA found each price to be fair, reasonable, and balanced. (Id. at 63048, 63054, 63059.)

Within a few weeks of NASA receiving the Option A proposals, Congress enacted the

Consolidated Appropriations Act, 2021, which appropriated $850 million for the HLS program

for fiscal year (“FY”) 2021. Pub. L. 116-260, 134 Stat. 1182 (2020). (See also AR Tab 108b26a

at 103671-73 (explaining the appropriation and its impact during the selection process).) For

FY 2021, NASA had sought an appropriation of $3.4 billion for the development of the moon-

lander systems. Office of Management and Budget, A Budget for America’s Future: Budget of

the U.S. Government (Fiscal Year 2021) 101 (Feb. 10, 2020). 2 Upon receipt of the FY 2021

appropriation, the SEP continued its work evaluating the proposals without amending or

canceling the solicitation. (AR Tab 108b26a at 103671.)

In their proposals, Blue Origin and SpaceX took different approaches in design and

operation of their moon-landing systems. Blue Origin proposed a three-element architecture for

its Integrated Lander, which consisted of an ascent element, a descent element, and a transfer

element. (AR Tab 32a at 33339-41.) Blue Origin’s proposal would require three launches. (AR

Tab 61 at 62852.) SpaceX, in contrast, proposed a single-element Integrated Lander called the

HLS Starship. (AR Tab 34d.55 at 56274-77.) SpaceX also proposed two types of supporting

spacecraft: propellant-storage depot and tanker vehicles. (Id. at 56274.) The supporting

spacecraft launch before the HLS Starship to aggregate and store propellant in low-Earth orbit

for the HLS Starship to access for the lunar mission. (Id.) SpaceX’s proposal would require 16

launches. (AR Tab 61 at 62874.)

The SEP evaluated the proposals and “produced a report for each offeror containing all of

the SEP’s findings, ratings, and other evaluative content.” (AR Tab 77 at 63039.) As required

This document is available at https://www.govinfo.gov/content/pkg/BUDGET-2021-

BUD/pdf/BUDGET-2021-BUD.pdf.

by the solicitation, the SEP provided adjectival ratings for the technical and management

evaluation factors:

Offeror Technical Rating (Factor 1) Management Rating (Factor 3)

Blue Origin Acceptable Very Good

Dynetics Marginal Very Good

SpaceX Acceptable Outstanding

(Id. at 63044.)

Although the SEP rated SpaceX’s management approach “Outstanding,” the SEP

assigned SpaceX a weakness for an inconsistency related to milestones within SpaceX’s

Integrated Master Schedule (“IMS”). (AR Tab 59c at 62812.) SpaceX had proposed a single

NASA-led FRR for its HLS Starship but no NASA-led FRRs for its supporting spacecraft. (AR

Tab 34d.33 at 55430.) As a result, of the 16 launches required under SpaceX’s proposal, only

one would have a NASA-led FRR before launch. The SEP explained that “[w]hile the offeror’s

proposed milestones, associated acceptance criteria, and IMS are internally consistent, they are

arguably not consistent with all milestone review requirements as set forth within and

contemplated by the solicitation’s [SOW] and the solicitation’s Milestone Acceptance Criteria

and Payment Schedule . . . .” (AR Tab 59c at 62812.)

The SEP found the relevant terms of the solicitation to be unclear. (Id. at 62813.) Under

one possible interpretation, “offerors were required to propose an FRR milestone (and associated

review) to be conducted and achieved for each proposed supporting spacecraft prior to launch

and flight operations.” (Id.) Under another possible interpretation, “offerors were required to

propose a single FRR covering the full scope of its demonstration mission prior to the launch of

any lander element or supporting spacecraft.” (Id.) The SEP found that SpaceX’s “proposed

FRR milestone is not in accordance with either interpretation.” (Id.) SpaceX “neither proposed

any FRR events dedicated to one or all of its supporting spacecraft, nor a single FRR to cover the

full scope of its demonstration mission prior to the launch of its first supporting spacecraft.”

(Id.) The SEP concluded that “this aspect of [SpaceX’s] proposal increases risk of unsuccessful

performance and constitutes a weakness.” (Id. at 62814.)

2. Post-Selection Negotiation

According to the contracting officer, after the SEP presented its final evaluation results to

the SSA, “the SSA noted that it was her opinion that SpaceX’s proposal was both highly rated

from a non-price perspective, and, in her judgment, provided abundant value at its Total

Evaluated Price.” (AR Tab 108b26a at 103673.) In a conversation with the SSA about the

budget, the contracting officer informed the SSA that “NASA’s available funding overall could

potentially support a contract award to SpaceX . . . , but that NASA was unable to award a

contract to SpaceX with the specific phasing of milestone payments SpaceX proposed.” (Id.

(emphasis in original).) NASA’s budget analyst had determined that about $345 million would

be available for FY 2021 Option A contractor payments. (Id.) SpaceX’s proposed FY 2021

milestone payments totaled [***], so there was about a [***] shortfall. (Id.) The contracting

officer thought that the shortfall “was likely not an insurmountable situation given the

flexibilities that NASA had built into the terms of the Option A solicitation ,” and that “post-

selection negotiations could be utilized to create a situation in which the Agency would be able

to afford making a contract award to SpaceX.” (Id.)

Given the information from the contracting officer, the SSA found that, “at the initial

prices and milestone payment phasing proposed by each of the Option A offerors, NASA’s

current fiscal year budget did not support even a single Option A award.” (AR Tab 77 at 63039.)

As a result, the SSA determined “that NASA should, as a first step, open price negotiations with

[SpaceX, whose proposal was] both very highly rated from a technical and management

perspective and that also had, by a wide margin, the lowest initially -proposed price . . . .” (Id.)

The SSA concluded that “it would be in the Agency’s best interests to make an initial,

conditional selection of SpaceX to enable the Contracting Officer . . . to engage in post-selection

price negotiations with this offeror.” (Id.; see also AR Tab 64 (making the initial, non-binding

selection of SpaceX for award and directing the contracting officer to engage in post-selection

negotiations).)

In the contracting officer’s letter to open negotiations, the contracting officer requested

that SpaceX submit its best final firm-fixed prices for two contract line-item numbers (“CLINs”),

adjust its payment phasing to accommodate NASA’s FY 2021 funding limitations, and add FRRs

to its proposal. (AR Tab 63.) The requested additional FRRs included the following:

(1) A single comprehensive Tanker Starship Supporting Spacecraft

FRR no later than two weeks prior to the first launch of the Tanker

Starship Supporting Spacecraft that will address flight readiness for

the entire Tanker Starship Supporting Spacecraft launch campaign;

(2) a Depot Starship FRR no later than two weeks prior to the launch

of the Depot Starship; and (3) within Attachment 12 [Review Plan]

only, NASA also requests that your firm include potential “delta-

FRRs” that would be triggered to occur in the event of anomalies,

mishaps, configuration changes, or other issues directly relevant to

flight readiness, if and when such issues arise.

(Id. at 62890 (emphasis in original).)

In response, SpaceX submitted a revised proposal. (See AR Tab 68 (providing the cover

letter for SpaceX’s revised proposal and describing the revisions).) SpaceX added the requested

FRRs for its HLS depot and tanker campaign flights. (Id. at 62903.) SpaceX also adjusted its

payment milestones so that those that would fall within FY 2021 could be accommodated within

NASA’s anticipated funding levels, but SpaceX maintained its original pricing regarding the two

CLINs. (Id. at 62902-03.) SpaceX did not reduce its overall price. (AR Tab 77 at 63039.)

3. Award

After a final review of the offerors’ SEP reports and SpaceX’s revised pricing proposal,

the SSA selected only SpaceX for award of the Option A contract. (Id. at 63039.) Although the

SSA reiterated NASA’s preference for making two awards, she noted that the amount of the

appropriation, when compared to the offerors’ prices, was “incongruent with NASA’s Option A

acquisition strategy.” (Id. at 63043.) The SSA analyzed each offeror’s proposal and explained

her selection determination for each. (Id. at 63044-60.)

After analyzing SpaceX’s proposal, the SSA determined “that SpaceX’s proposal is

meritorious and advantageous to the Agency, and that it aligns with the objectives as set forth in

[the Option A] solicitation.” (Id. at 63049.) Regarding SpaceX’s technical approach, the SSA

found that “the qualitative attributes of SpaceX’s aggregated strengths and its aggregated

weaknesses are offsetting and that commensurate risk accompanies the meritorious aspects of

SpaceX’s technical approach.” (Id. at 63048.) Regarding SpaceX’s management approach, the

SSA “concur[red] with the SEP that SpaceX’s management approach is of exceptional merit and

fully responsive to the objectives of the solicitation.” (Id. at 63049.) She found “that the

qualitative attributes of SpaceX’s aggregated strengths, including its rating of High for its Base

Period Performance, far outweigh the qualitative attributes of its evaluated weaknesses, which

were relatively minor.” (Id.)

The SSA “conclude[d] that SpaceX’s acceptable technical approach coupled with its

outstanding management approach provide abundant value for NASA at its Total Evaluated

Price.” (Id. at 63049-50.) She also noted that, due to NASA’s post-selection negotiation with

SpaceX, “the Agency’s budget now permits the award of a contract to SpaceX.” (Id. at 63050.)

The SSA selected SpaceX’s proposal for an award. (Id.)

The SSA’s selection determination regarding Blue Origin’s proposal was “based upon the

results of its evaluation considered in light of the Agency’s currently available and anticipated

future funding for the HLS program.” (Id. at 63056.) Although the SSA found that “Blue

Origin’s proposal has merit and is largely in alignment with the technical and management

objectives set forth in the solicitation,” she did not select Blue Origin for award “because [she

found] that its proposal does not present sufficient value to the Government when analyzed

pursuant to the solicitation’s evaluation criteria and methodology.” (Id.)

The SSA “considered whether it may be in the Government’s best interests to engage in

price negotiations to seek a lower best and final price from Blue Origin.” (Id.) The SSA

determined that she could not open price negotiations with Blue Origin in good faith, “given

NASA’s current and projected HLS budgets.” (Id.) “After accounting for a contract award to

SpaceX, . . . [the SSA did] not have enough funding available to even attempt to negotiate a price

from Blue Origin that could potentially enable a contract award.” (Id.) Accordingly, the SSA

did not select Blue Origin’s proposal for award. (Id.)

The SSA also did not select Dynetics’ proposal for award. (Id. at 63060.) The details of

that decision are not relevant to this case.

D. GAO Protest

After receiving notice of NASA’s single award to SpaceX, Blue Origin and Dynetics

filed protests (later consolidated) with the Government Accountability Office (“GAO”). (AR

Tab 108b67a at 105016.) As summarized by the GAO, the protests “primarily contend[ed] that

the agency was required to open discussions, amend, or cancel the Option A BAA when NASA,

after the receipt of proposals, determined that it had less funding than it needed to support

multiple awards for the HLS program.” (Id. at 105005.) Blue Origin and Dynetics also argued

“that NASA unreasonably evaluated proposals.” (Id.) The GAO rejected each of the protestors’

arguments but one. Blue Origin Fed’n, LLC; Dynetics, Inc.-A Leidos Co., B-419783, B-

419783.2, B-419783.3, B-419783.4, 2021 CPD ¶ 265 (Comp. Gen. July 30, 2021).

(AR Tab 108b67a.)

The protestors argued that SpaceX’s proposal failed to include an FRR for each launch as

allegedly required by the Option A solicitation. (AR Tab 108b67a at 105074-75.) The SOW

provided that “[t]he FRR should be completed by two (2) weeks before launch of each HLS

element.” (AR Tab 27e at 32972 (emphasis added).) The Milestone Acceptance Criteria and

Payment Schedule provided that “[a]n FRR is required prior to each launch of an HLS element.”

(AR Tab 27k at 33187 (emphasis added).) The protestors alleged that NASA waived the FRR

requirement for SpaceX when NASA required SpaceX to include only three FRRs, rather than

16 FRRs, one for each of its 16 launches. (AR Tab 108b67a at 105075.)

The GAO agreed with the protestors on this issue. (Id. at 105076.) The GAO interpreted

“HLS element” to include supporting spacecraft. (Id.) The GAO found that a contrary reading

would require the GAO “to read ‘supporting spacecraft’ out of the definition of ‘HLS,’ and the

‘each’ out of ‘each launch.’” (Id.) Because the solicitation required an FRR for launches of

supporting spacecraft, the GAO concluded that SpaceX’s three proposed FRRs were insufficient:

“where the Option A BAA required an FRR before each launch of each HLS element, SpaceX’s

three proposed FRRs--or one for each type of HLS element--were insufficient when SpaceX’s

concept of operations will require 16 total launches.” (Id. (emphasis in original).)

Despite siding with the protestors on the number and timing of FRRs in SpaceX’s

proposal, the GAO found “no basis on which to sustain the protests because the protestors [had]

failed to establish any reasonable possibility of resulting competitive prejudice.” (Id. at 105077.)

The protestors had not alleged “that they otherwise could or would have changed their proposals

to substantially increase their likelihood of receiving the award had they known of the waiver of

the FRR requirement.” (Id.) The GAO noted that Blue Origin’s proposed concept of operations

was “materially different” from SpaceX’s proposed concept of operations. (Id.) Blue Origin,

therefore, could not “reasonably establish how it could have improved the competitiveness of its

proposal had it known that the agency would relax the FRR requirement as it did.” (Id.)

Having found no prejudice to Blue Origin and Dynetics, the GAO denied the protests.

(AR Tab 108b67a at 105080.)

E. Procedural History

On August 13, 2021, Blue Origin filed its complaint in this court. (ECF 1.) Blue Origin

asserts five counts, alleging that NASA (1) unlawfully waived material solicitation requirements;

(2) engaged in improper and unequal discussions; (3) failed to amend its solicitation upon a

change in requirements; (4) failed to evaluate SpaceX’s proposal in accordance with the

solicitation; and (5) breached an implied-in-fact contract of good faith and fair dealing. (Id.

¶¶ 119-75.)

Blue Origin seeks declaratory and injunctive relief, requesting that the Court “[d]eclare

that NASA’s award of the HLS Option A contract to SpaceX is arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law”; “[e]njoin NASA and SpaceX from

commencing or continuing performance of the HLS Option A contract”; and “[d]irect NASA to

open discussions with all offerors, allow proposal revisions, re-evaluate revised proposals, and

make a new selection and award.” (Id. at 58, Prayer for Relief.) Blue Origin also seeks

attorneys’ fees and costs, its proposal costs, and any other relief that the Court deems just and

proper. (Id.)

The parties engaged in preliminary motions practice regarding how much of the

complaint could be filed in redacted form. The Court heard oral argument on the issue , rendered

a tentative oral ruling, and directed the parties to continue their negotiations over the redactions.

The parties largely resolved their disagreements, and, after a ruling on two remaining issues, the

parties filed public versions of their filings.

After the government filed the administrative record, which exceeds 135,000 pages, Blue

Origin moved to complete that record, arguing that documents were missing from it. (ECF 37.)

After hearing oral argument on the matter, the Court orally denied that motion. (ECF 45.)

The government has moved to dismiss or, in the alternative, for judgment on the

administrative record. (ECF 60.) Blue Origin and SpaceX have also moved for judgment on the

administrative record. (ECF 61 & 62.) The motions have been fully briefed, and the Court heard

oral argument on October 21, 2021.

II. STANDARD OF REVIEW

A. Motion to Dismiss

The government has moved to dismiss both for lack of subject-matter jurisdiction under

RCFC 12(b)(1) and for failure to state a claim under RCFC 12(b)(6).

Under RCFC 12(b)(1), the “court must accept as true all undisputed facts asserted in the

plaintiff’s complaint and draw all reasonable inferences in favor of the plaintiff.” Trusted

Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir. 2011). When a plaintiff’s

jurisdictional facts are challenged, only those factual allegations that the government does not

controvert are accepted as true. Shoshone Indian Tribe of Wind River Rsrv. v. United States,

672 F.3d 1021, 1030 (Fed. Cir. 2012). The court is not “‘restricted to the face of the pleadings’”

in resolving disputed jurisdictional facts, id. (quoting Cedars-Sinai Med. Ctr. v. Watkins, 11 F.3d

1573, 1584 (Fed. Cir. 1993), cert. denied, 512 U.S. 1235 (1994)), and may review evidence

outside the pleadings. Id.

The plaintiff has the burden of establishing jurisdiction by a preponderance of the

evidence. Trusted Integration, Inc., 659 F.3d at 1163. If the court finds that it lacks subject-

matter jurisdiction over the plaintiff’s claim, RCFC 12(h)(3) requires dismissal of the claim.

Under RCFC 12(b)(6), dismissal “is appropriate when the facts asserted by the claimant

do not entitle him to a legal remedy.” Lindsay v. United States, 295 F.3d 1252, 1257 (Fed. Cir.

2002). The court must both accept as true a complaint’s well-pleaded factual allegations,

Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009), and draw all reasonable inferences in favor of the

non-moving party. Sommers Oil Co. v. United States, 241 F.3d 1375, 1378 (Fed. Cir. 2001). To

avoid dismissal under RCFC 12(b)(6), a complaint must allege facts “plausibly suggesting (not

merely consistent with)” a showing that the plaintiff is entitled to the relief sought. Bell Atl.

Corp. v. Twombly, 550 U.S. 544, 557 (2007). “The plausibility standard is not akin to a

‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted

unlawfully.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556).

B. Motion for Judgment on the Administrative Record

On a motion for judgment on the administrative record pursuant to RCFC 52.1, the

court’s review is limited to the administrative record, and the court makes findings of fact as if it

were conducting a trial on a paper record. See Bannum, Inc. v. United States, 404 F.3d 1346,

1354 (Fed. Cir. 2005). The court must determine whether a party has met its burden of proof

based on the evidence contained within the administrative record. Id. at 1355. Unlike motions

for summary judgment, genuine issues of material fact will not foreclose judgment on the

administrative record. Id. at 1356.

III. JURISDICTION

The Tucker Act, 28 U.S.C. § 1491(b)(1), establishes the jurisdiction of the Court of

Federal Claims over bid protests:

[T]he Unite[d] States Court of Federal Claims . . . shall have

jurisdiction to render judgment on an action by an interested party

objecting to a solicitation by a Federal agency for bids or proposals

for a proposed contract or to a proposed award or the award of a

contract or any alleged violation of statute or regulation in

connection with a procurement or a proposed procurement.

28 U.S.C. § 1491(b)(1). This provision “expressly waives sovereign immunity for claims against

the United States in bid protests,” covering “a broad range of potential disputes arising during the

course of the procurement process.” Sys. Application & Techs., Inc. v. United States, 691 F.3d

1374, 1380 (Fed. Cir. 2012).

To establish standing under this court’s bid-protest jurisdiction, a protestor must be an

“interested party.” 28 U.S.C. § 1491(b)(1). The Federal Circuit has interpreted this term to

require a protestor to have alleged facts, which if true, “establish that it (1) is an actual or

prospective bidder, and (2) possesses the requisite direct economic interest.” Rex Serv. Corp. v.

United States, 448 F.3d 1305, 1307 (Fed. Cir. 2006). Here, the first prong is not at issue because

Blue Origin is an actual bidder.

The second prong, in contrast, is at issue. In determining whether a protestor has alleged

facts demonstrating the “requisite direct economic interest,” the court must decide whether those

alleged facts show the protestor was prejudiced by the alleged errors. Statistica, Inc. v.

Christopher, 102 F.3d 1577, 1581 (Fed. Cir. 1996). To establish prejudice for standing purposes

in a post-award bid protest, the protestor’s complaint must “show that there was a ‘substantial

chance’ it would have received the contract award but for the alleged error in the procurement

process.” Info. Tech. & Applications Corp. v. United States, 316 F.3d 1312, 1319 (Fed. Cir.

2003) (quoting Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir.

1999) (citation omitted)). The government and SpaceX argue that Blue Origin’s allegations do

not establish, as a matter of law, that it was prejudiced by the alleged errors.

For the limited purpose of determining whether it has standing, a protestor’s allegations

are assumed to be true. Am. Relocation Connections, L.L.C. v. United States, 789 F. App’x 221

(Fed. Cir. 2019) (“For standing, we presume the party bringing a bid protest will succeed on the

merits of its claim and ask whether it has alleged an injury (or prejudice) caused by the procuring

agency’s actions.”); L-3 Commc’ns Corp. v. United States, 99 Fed. Cl. 283 (2011) (“[T]he

prejudice determination for purposes of standing assumes all non-frivolous allegations to be true,

whereas the post-merits prejudice determination is based only on those allegations which have

been proven true.”). “Prejudice is a question of fact . . . .” Am. Relocation Connections, 789 F.

App’x at 225 (citing Bannum, 404 F.3d at 1353-54).

The Court first considers whether Blue Origin has standing based on the proposal it

submitted to NASA and then considers whether it has standing based on an alternative proposal,

which Blue Origin now alleges it would have submitted if it had known that NASA would waive

certain solicitation requirements.

A. Submitted Proposal

In response to NASA’s HLS Option A solicitation, Blue Origin proposed a three-element

architecture for its Integrated Lander. (AR Tab 32a at 33339-41.) This proposed architecture

would require three launches and no support spacecraft. (AR Tab 61 at 62852.) Blue Origin’s

Total Evaluated Price totaled just under $6 billion; Blue Origin sought about [***] during

FY 2021. (AR Tab 61 at 62856; see also AR Tab 108b67a at 105010 (calculating price for

FY 2021) (citing AR Tab 32d.87).)

The HLS procurement was conducted “as an ‘other competitive procedure’ in accordance

with FAR 6.102(d)(2) and FAR 35.016 (as deviated).” (AR Tab 27 at 24473.) The governing

BAA regulation, FAR 35.016, provides that “[w]ritten evaluation reports on individual proposals

will be necessary but proposals need not be evaluated against each other since they are not

submitted in accordance with a common work statement.” FAR 35.016(d). The solicitation

explained that NASA would “not conduct a comparative analysis and trade-off” among

proposals; instead, “each proposal [would] be evaluated on its own individual merits.” (AR

Tab 27 at 24473.)

“In light of this structure,” the government argues, “Blue Origin lacks standing to

challenge NASA’s evaluation of SpaceX’s proposal at all, because Blue Origin was not

competing against SpaceX, but hoping to convince NASA that its proposal merited the

investment of available NASA research and development funding.” (ECF 60 at 39-40.) During

oral argument, the government expanded on its position to argue that an unsuccessful bidder

under a BAA could challenge an agency’s failure to award it a contract but could not challenge

or seek to enjoin an agency’s award to another, successful bidder.

That general argument must fail in the face of the facts underlying NASA’s solicitation;

the government’s argument elevates form over substance. The Option A solicitation noted that

this procurement deviated from the typical BAA procedures. (AR Tab 27 at 24473.) Although

“proposals need not be evaluated against each other since they are not submitted in accordance

with a common work statement,” FAR 35.016(d), for this procurement there was in fact a

common work statement, the SOW. (See AR Tab 27e.)

Not only was there a common work statement, but NASA did in fact compare the

proposals to each other during parts of the evaluation. NASA’s comparison among proposals is

evidenced by the SSA’s Source Selection Statement. The SSA acknowledged the competitive

nature of the acquisition by explaining that “NASA’s HLS acquisition strategy has been to

maintain a competitive environment through the initial crewed lunar demonstrations and beyond,

thereby creating performance and pricing incentives for contractors at all stages of the HLS

Program.” (AR Tab 77 at 63043.) Moreover, her summary of evaluation results placed the

technical and management adjectival ratings for all offerors in a common chart and then

explicitly compared proposal prices. (Id. at 63044.)

Because NASA compared and competed against each other the three proposals for award,

the government’s argument that Blue Origin lacks standing based only on the fact that NASA

used a BAA as its method of procurement is not congruent with the facts of the award at issue.

The government’s argument that Blue Origin is unable to show prejudice on this basis alone is

insufficient to defeat Blue Origin’s standing. Other facts in this case, however, do prevent Blue

Origin from establishing prejudice to support its standing.

1. Proposed Price Greatly Exceeded Available Funding

Blue Origin’s milestone payments for FY 2021 were more than triple NASA’s FY 2021

budget for the Option A contract. Upon receiving its FY 2021 appropriation from Congress,

NASA determined that about $345 million would be available for FY 2021 Option A contractor

payments. (AR Tab 108b26a at 103673.) Blue Origin’s proposal had sought about [***] during

FY 2021. (AR Tab 108b67a at 105010 (citing AR Tab 32d.87).)

Considering the funding shortfall, even if the Court found that either NASA’s evaluation

of SpaceX was improper or SpaceX’s proposal was unawardable, Blue Origin cannot show that

it would be in a position for award. NASA had anticipated when it issued the solicitation that it

may have limited funding and expressly “reserve[d] the right to select for award multiple, one, or

none of the proposals received . . . .” (AR Tab 27 at 24481 (emphasis added).) Once Congress

made its funding decision, NASA could not have awarded Blue Origin the contract at its

proposed price or anything close to it.

SpaceX’s proposed FY 2021 milestone payments, totaling [***], were also above

NASA’s funding limit. (AR Tab 108b26a at 103673.) The contracting officer concluded that

the shortfall of approximately [***] between the funds available to NASA and SpaceX’s

proposal was not insurmountable. (Id.) Indeed, SpaceX did adjust its payment schedule to meet

NASA’s available budget during post-selection negotiations. (AR Tab 68 at 62902-03.)

Blue Origin alleges that it also would have adjusted its payment schedule to meet

NASA’s budget. Robert Smith, Blue Origin’s final approval authority for its strategy and offer

to NASA, averred that he “can state definitively that Blue Origin would have fit its proposal

within the Agency’s estimated budget for an HLS Option A contract.” (ECF 61-1, Pl.’s Ex. 1,

Decl. of Robert H. Smith, ¶ 26.) During Blue Origin’s GAO protest, Jeff Bezos, Blue Origin’s

founder, published an open letter to NASA Administrator Nelson, offering to waive “‘all

payments in the current and next two government fiscal years up to $2B to get the program back

on track right now.’” (ECF 1, ¶ 111 (quoting Letter from Jeff Bezos to Administrator Nelson).)

In the protest before the Court, Mr. Smith raised the figure to “over $3 billion as a Blue Origin

private contribution to add valuable competition and assist in addressing NASA’s HLS Option A

budget and funding shortfall . . . .” (ECF 61-1, Pl.’s Ex. 1, Decl. of Robert H. Smith, ¶ 24.)

These post-award offers to contribute funds were not before NASA at the time it made its

award, and NASA had no obligation to ask Blue Origin to improve its proposal by absorbing

costs or lowering the price. The solicitation warned offerors “that the Government may evaluate

proposals and award contracts without conducting discussions or post-selection negotiations,”

and, “[t]herefore, each Offeror shall submit only one proposal which represents its best approach

to meeting the requirements of the solicitation.” (AR Tab 27 at 24473 (emphasis added).)

Faced with this explicit direction, Blue Origin chose to submit a proposal that did not

include a $2 or $3 billion corporate contribution. Blue Origin’s effort to conduct public-relations

negotiations after the award in the context of its bid protest is insufficient to support a finding of

prejudice when its proposed FY 2021 milestone payments were priced at more than [***] times

NASA’s budget for the Option A contract. When considered with other factors discussed below,

the Court finds that this funding shortfall was too substantial for Blue Origin to establish that it

would have had a substantial chance of award but for the alleged evaluation errors. See Alfa

Laval Separation, Inc., 175 F.3d at 1368 (“[W]hile price differential may be taken into account,

it is not solely dispositive; we must consider all the surrounding circumstances in determining

whether there was a substantial chance that a protestor would have received an award but for a

significant error in the procurement process.”). 3

2. No Supporting Spacecraft

Blue Origin’s lead claim alleges that NASA waived certain solicitation requirements for

SpaceX’s proposal. (ECF 1, ¶¶ 119-37.) Specifically, Blue Origin alleges that NASA waived

required reviews for SpaceX’s supporting spacecraft. (Id.) As the GAO found with respect to

the FRRs, however, Blue Origin could not have benefited from a similar waiver because Blue

Origin had not proposed any supporting spacecraft. (See AR Tab 108b67a at 105077-78.) As

the Federal Circuit has held, “[w]ithout a showing of harm specific to the asserted error, there is

no injury to redress, and no standing to sue.” Labatt Food Serv., Inc. v. United States, 577 F.3d

1375, 1381 (Fed. Cir. 2009) (finding that there was no connection between the government’s

error and the protestor’s failure to secure the contract).

SpaceX’s approach differed from Blue Origin’s approach. SpaceX proposed two types of

supporting spacecraft along with a single-element Integrated Lander. (AR Tab 34d.55 at 56274-

77.) Blue Origin did not propose any supporting spacecraft; instead, it proposed a three-element

architecture for its Integrated Lander. (AR Tab 32a at 33339-41.) As a result of this difference

in approach, SpaceX’s proposal would require 16 launches (of which 15 would be for supporting

spacecraft) (AR Tab 61 at 62874), while Blue Origin’s proposal would require three launches,

one for each element of its Integrated Lander (AR Tab 61 at 62852).

Setting aside its hypothetical alternative proposal discussed below, Blue Origin cannot

demonstrate that it could have benefited from a similar waiver for supporting spacecraft—Blue

Origin proposed no supporting spacecraft. (See AR Tab 32a at 33339-41.) Even if NASA erred

in not requiring reviews for the supporting spacecraft proposed by SpaceX, Blue Origin cannot

meet its burden to show that it was competitively injured by such a waiver.

3. Noncompliance

In order to overcome the lack of direct competitive injury attributable to the differences

between SpaceX’s proposal and its own, Blue Origin alleges that SpaceX’s proposal was not

compliant with the terms of the solicitation and unawardable. In contrast, Blue Origin alleges

that its own proposal was next in line for award because it was compliant and awardable.

According to Blue Origin, NASA should not have chosen SpaceX for the post-selection

negotiation but instead should have fallen back on Blue Origin’s proposal, because it had

submitted a compliant, awardable proposal and was next in line. This argument is fatally flawed

3 Although Alfa Laval held at the merits stage that a price differential alone is not dispositive,

the price differential in that case resulted from differences between offers. See Alfa Laval

Separation, Inc., 175 F.3d at 1368. The support for finding no prejudice in this case is stronger

because the price disparity exists between NASA’s available funding and Blue Origin’s proposal

price. The difference between Blue Origin’s proposal price and SpaceX’s proposal price —

though also disparate—does not factor into the Court’s analysis here.

because NASA determined that Blue Origin’s submitted proposal also was not in compliance

with the solicitation.

The solicitation provided that “[t]he Government will not make advance payments;

proposals containing an advance payment are ineligible for contract award.” (AR Tab 27 at

24479.) As the SSA noted, the SEP identified “two instances of proposed advance payments

within Blue Origin’s proposal. . . . Specifically, Blue Origin proposed milestones at the outset of

its Option A performance that the SEP determined were not commensurate with performance.”

(AR Tab 77 at 63054.)

The SSA “concur[red] with the SEP’s assessment that [Blue Origin’s] kickoff meeting-

related payments are counter to the solicitation’s instructions and render Blue Origin’s proposal

ineligible for award without the Government engaging in discussions or negotiations with Blue

Origin, either of which would provide an opportunity for it to submit a compliant revised

proposal.” (Id.) The SSA found that Blue Origin’s proposal was “not awardable.” (Id. at 63056

n.1.)

Blue Origin, in a declaration of its Senior Vice President of Advanced Development

Programs, alleges that it could have explained the purported advance payment issue if NASA

had opened negotiations with Blue Origin. (ECF 61-1, Pl.’s Ex. 2, Decl. of Brent Sherwood,

¶ 14.) Blue Origin allegedly “would have made clear in its proposal that the purported advance

payment issue discussed in Blue Origin’s SEP report were [sic] not advance payments but rather

were long-lead item procurement payments.” (Id.)

NASA, however, was under no obligation to negotiate with Blue Origin. The solicitation

had provided that “[t]he Government may evaluate proposals and award contracts without

conducting post-selection negotiations or discussions with Offerors . . . .” (AR Tab 27 at 24433

(bold omitted).) The SSA explained that she would have allowed Blue Origin to correct the

advance-payment issue through negotiations or discussions, but she did not conclude that Blue

Origin’s proposal “present[ed] a good value to the Government” sufficient to warrant either

discussions or negotiations. (AR Tab 77 at 63056-57 n.1.)

Accordingly, even assuming its allegations to be true, Blue Origin cannot establish that it

would have had a substantial chance of award but for NASA’s alleged errors. Blue Origin’s

submitted proposal was priced at more than three times NASA’s FY 2021 budget for the Option

A contract, would not have benefited from waived reviews for supporting spacecraft, and was

unawardable without discretionary negotiations. Considering these factors together, Blue

Origin’s allegations cannot establish prejudice for purposes of standing.

B. Alternative Proposal

As noted, the GAO found that Blue Origin could not establish prejudice for its submitted

proposal. Blue Origin pivots and now alleges before the Court that it would have submitted an

alternative proposal if it had known that NASA would waive solicitation requirements. Blue

Origin alleges that the alternative proposal it would have submitted would have both received

higher ratings than SpaceX’s proposal and been within NASA’s budget. (ECF 1, ¶ 26; see also

ECF 69 at 46-49.)

Blue Origin alleges that it “would have proposed a fundamentally different technical

approach.” (ECF 1, ¶ 26; see also ECF 61-1, Pl.’s Ex. 1, Decl. of Robert H. Smith, ¶¶ 12-14

(explaining Blue Origin’s alternative approach), Pl.’s Ex. 2, Decl. of Brent Sherwood, ¶ 14

(same).) Blue Origin asserts that it too would have proposed a single-element Integrated Lander,

[***]. (ECF 1, ¶ 26.) This alternative design would “take full advantage of Blue Origin’s

[***].” (Id. ¶ 13.) As did SpaceX’s proposal, to support its own single-element Integrated

Lander, “Blue Origin would have proposed a large number of launches and Low Earth Orbit

rendezvous events, allowing for the incorporation of elements such as a propellant depot in Low

Earth Orbit to be refueled by multiple launches.” (Id.)

The details of Blue Origin’s alternative approach are unclear, as is the precise nature of

what Blue Origin would have proposed; Blue Origin has not submitted any contemporaneous

documentary evidence to support its allegations of its alternative architecture. Mr. Smith avers

that “Blue Origin originally proposed to use the [***] in its Base Period proposal but changed

this approach” because of the Option A requirements. (ECF 61-1, Pl.’s Ex. 1, Decl. of Robert H.

Smith, ¶ 13.) Blue Origin, however, had proposed the same three-element lander for its proposal

during the base-period contract (AR Tab 9 at 266), and the [***] is already an element of the

proposal Blue Origin submitted for Option A (AR Tab 32a at 33385). Blue Origin has not

explained how to reconcile the record with its proposed approach.

The three base-period contractors were required to use the standards developed during the

base period in preparing their Option A proposals. (AR Tab 27 at 24443.) NASA intended “to

transition between the Base period and Option A period without any break in contractor

performance.” (Id. at 24429.) Although NASA intended to continue performance into the

Option A contract, the government admits that the Option A solicitation “did not expressly

prohibit an offeror from proposing an approach entirely different from the one it had spent 12

months developing during its base period performance.” (ECF 68 at 13.)

Despite Blue Origin’s allegation that it had been [***], it would have had to start from

scratch with NASA. Blue Origin’s alternative proposal is purely speculative, including

hypothetical pricing and hypothetical technical ratings.

A protestor need not show that it would have won the contract but for the alleged errors,

but conjecture is not enough. Bannum, 404 F.3d at 1358; accord HVF W., LLC v. United States,

846 F. App’x 896, 898 (Fed. Cir. 2021) (holding that a protestor’s allegations based on

conjecture “are insufficient to show [the protestor] had a substantial chance of winning the

award”).

Blue Origin alleges that its price would have been lower and speculates that its technical

ratings would have been higher. (ECF 1, ¶ 26.) The Court has no way to perform a hypothetical

evaluation to determine whether Blue Origin’s alternative proposal would even be awardable

much less have a substantial chance of award. Blue Origin is in the position of every

disappointed bidder: Oh. That’s what the agency wanted and liked best? If we had known, we

would have instead submitted a proposal that resembled the successful offer, but we could have

offered a better price and snazzier features and options. Blue Origin cannot use its speculative

alternative proposal to establish that it would have had a substantial chance of award but for

NASA’s alleged evaluation errors. Such an approach runs directly counter to the judicial role in

Administrative Procedure Act (“APA”) review, as applied in resolving bid protests.

In cases in which an agency would be required to reopen the bidding process, the Federal

Circuit has held that “all a protestor must establish to demonstrate prejudice is that . . . it is a

qualified bidder and could compete for the contract.” Tinton Falls Lodging Realty, LLC v.

United States, 800 F.3d 1353, 1360 (Fed. Cir. 2015). In Tinton Falls, only small-business

concerns were eligible to compete for the solicitation. Id. at 1359. If the protestor’s bid protest

succeeded, then the agency would have been required to reopen the bidding process because no

eligible bidders would be remaining. Id. The protestor itself admitted that it was not a small-

business concern for purposes of the original solicitation but argued that it could compete if the

bidding process was reopened on an unrestricted basis. Id. On these facts, the Federal Circuit

upheld on clear-error review a determination by this court that the protestor had demonstrated

prejudice. Id. at 1360.

Blue Origin alleges that its alternative proposal is evidence that it was prejudiced , but

Blue Origin does not base its standing argument on Tinton Falls, so the parties did not brief

applicability of that case to the facts and circumstances of the procurement at issue. Because

Blue Origin has not raised the argument, it is waived. Nevertheless, for the sake of

completeness, the Court considers whether an argument premised on Tinton Falls would have

led to a different conclusion on standing. It would not have.

The allegations in Tinton Falls were different from Blue Origin’s. In Tinton Falls, the

plaintiff’s protest, if successful, would have meant that there were no eligible awardees, thus

requiring the government to go back to square one. In contrast, in this case, Blue Origin’s

allegations, even if true, would not require the government to go back and recompete the

requirements at issue. Rather, under the express terms of the solicitation, NASA would have

been permitted to select SpaceX as the presumptive awardee and to engage in post-selection

negotiations with SpaceX—to the exclusion of all other offerors—and thus cure any deficiency,

if there were any. (AR Tab 27 at 24480.) Because NASA did exactly what the solicitation

permitted, Blue Origin cannot demonstrate a “substantial chance” of award, even assuming all its

factual allegations (as opposed to legal conclusions) were true. Put differently, even if Blue

Origin’s allegations are assumed to be true, the result of accepting them would mean that NASA

would only have to go back to engage in further negotiations with SpaceX; it would not require a

complete redo of the entire evaluation and selection process. Cf. Bluewater Mgmt. Grp., LLC v.

United States, 150 Fed. Cl. 588, 611 (2020) (finding that “nothing in the solicitation prohibited

the [agency] from concluding that a not-fully-compliant proposal could be made compliant and,

therefore, eligible for award, after discussions”).4

In sum, Blue Origin cannot establish prejudice on review of its submitted proposal or its

hypothetical alternative proposal. Even assuming Blue Origin’s allegations of errors to be true,

Blue Origin cannot establish that it was prejudiced by those errors, especially when taking into

account the broad discretion afforded NASA under FAR part 35. Accordingly, the Court lacks

standing over each of Blue Origin’s five claims, all of which are based on this court’s 28 U.S.C.

§ 1491(b)(1) jurisdiction.

IV. WAIVER

Relying on the waiver rule established in Blue & Gold Fleet, L.P. v. United States,

492 F.3d 1308 (Fed. Cir. 2007), the government and SpaceX also argue that many of Blue

Origin’s objections are waived.

Under Blue & Gold Fleet, “a party who has the opportunity to object to the terms of a

government solicitation containing a patent error and fails to do so prior to the close of the

bidding process waives its ability to raise the same objection subsequently in a bid protest action

in the Court of Federal Claims.” Id. at 1313. This waiver rule furthers the statutory mandate in

28 U.S.C. § 1491(b)(3), which provides that “‘the courts shall give due regard to the interests of

national defense and national security and the need for expeditious resolution of the action.’” Id.

(quoting 28 U.S.C. § 1491(b)(3)) (emphasis in original).

The Federal Circuit reasoned that the rationale underlying its doctrine applicable to

challenges of solicitations with patent ambiguities applies when a party recognizes a patent error

in a solicitation but does not object until after the close of the bidding process. Id. at 1314. The

“waiver rule . . . prevents contractors from taking advantage of the government and other

bidders, and avoids costly after-the-fact litigation.” Id. Without a waiver rule, a contractor could

discover a defect in a solicitation, remain silent, and submit its first proposal. Id. If the first

proposal is not selected for award, “the contractor could then come forward with the defect to

restart the bidding process, perhaps with increased knowledge of its competitors.” Id.

Expanding its application of Blue & Gold Fleet’s waiver rule, the Federal Circuit has

held that “the reasoning of Blue & Gold applies to all situations in which the protesting party had

Bluewater Management involved a procurement governed by FAR part 15, which permits

discussions to be held with offerors who submitted deficient proposals. 150 Fed. Cl. at 611. The

basis for finding that NASA could engage in further negotiations with SpaceX is even stronger in

this case because the solicitation was conducted as an “other competitive procedure” under

FAR 6.102(d)(2) and FAR 35.016 (as deviated). These regulations do not impose requirements

on agencies regarding exchanges with offerors and, thus, leave the agency with discretion within

the bounds of fairness. The solicitation here expressly reserved to NASA “the right to negotiate

any aspect of an Offeror’s milestone payment amounts, schedule, and/or acceptance criteria prior

to award of Option A.” (AR Tab 27 at 24467.)

the opportunity to challenge a solicitation before the award and failed to do so.” COMINT Sys.

Corp. v. United States, 700 F.3d 1377, 1382 (Fed. Cir. 2012). “[A]ssuming that there is adequate

time in which to do so, a disappointed bidder must bring a challenge to a solicitation containing a

patent error or ambiguity prior to the award of the contract.” Id.

Courts have held that when Blue & Gold Fleet’s waiver rule applies, a court must dismiss

the action; it has no discretion to allow the plaintiff to maintain the action. See, e.g., SEKRI, Inc.

v. United States, 152 Fed. Cl. 742, 752 (2021), appeal filed, No. 21-1936 (Fed. Cir. 2021);

Contract Servs., Inc. v. United States, 104 Fed. Cl. 261, 273 (2012); Unisys Corp. v. United

States, 89 Fed. Cl. 126, 139 (2009); see also Per Aarsleff A/S v. United States, 829 F.3d 1303,

1317 (Fed. Cir. 2016) (Reyna, J., concurring) (“Dismissal is mandatory, not discretionary.”).

The Court considers the issue of waiver under the RCFC 12(b)(6) standard. SEKRI, Inc.,

152 Fed. Cl. at 752-54; accord 10 Tanker Air Carrier, LLC v. United States, No. 21-1084, 2021

WL 3828652, at *13 n.5 (Fed. Cl. Aug. 27, 2021); WaveLink, Inc. v. United States, 154 Fed. Cl.

245, 266 n.15 (2021). But see M.R. Pittman Grp., LLC v. United States, 154 Fed. Cl. 241, 245

(2021) (dismissing claim under Blue & Gold Fleet for lack of subject-matter jurisdiction under

RCFC 12(h)(3)), appeal filed, No. 21-2325 (Fed. Cir. 2021).

The government and SpaceX argue that many of Blue Origin’s objections in Counts 1

through 3 of its complaint are waived pursuant to Blue & Gold Fleet. These counts allege that

NASA (1) unlawfully waived material solicitation requirements; (2) engaged in improper and

unequal discussions; and (3) failed to amend its solicitation upon a change in requirements.

A. Count 1: Waiver of Solicitation Requirements

Blue Origin alleges that NASA waived for SpaceX two types of critical milestone

reviews—the FRRs and the DCR—and several other technical and readiness reviews. (ECF 1,

¶¶ 119-37.) In outlining the requirements for the conduct of the FRR and the DCR, the relevant

provisions of the solicitation refer to milestone reviews required for an “HLS element.” Blue

Origin argues the reference to “HLS element” in the solicitation includes all spacecraft required

by the proposal, including supporting spacecraft.

The solicitation’s Milestone Acceptance Criteria and Payment Schedule provided that

“[a]n FRR is required prior to each launch of an HLS element.” (AR Tab 27k at 33187

(emphasis added).) The SOW added that “[t]he FRR should be completed by two (2) weeks

before launch of each HLS element.” (AR Tab 27e at 32972 (emphasis added).) Although the

SOW provided that the DCR “should be completed at first HLS launch – 9 Months (L-9)” (Id. at

32969 (emphasis added)), the Milestone Acceptance Criteria and Payment Schedule clarified that

the DCR was to be scheduled “9 months before first HLS element launch (L-9 months)” (AR

Tab 27k at 33187 (emphasis added)).

The government and SpaceX argue that the term “HLS element” refers to only the

Integrated Lander, not supporting spacecraft. (ECF 60 at 54-58; ECF 62 at 39-46.) They argue

that the requirements for an FRR and a DCR preceding the launch of an HLS element are

appropriate only for crewed vehicles and not uncrewed supporting spacecraft. Although all

parties argue that “HLS element” is unambiguous, the government and SpaceX argue that, if the

term is ambiguous, it is patently ambiguous, and Blue Origin’s challenge is waived.

1. Ambiguity

To interpret a solicitation, courts employ the same principles that govern the

interpretation of contracts. Safeguard Base Operations, LLC v. United States, 989 F.3d 1326,

1344 (Fed. Cir. 2021). Thus, courts “begin with the plain language of the document.” Banknote

Corp. of Am. v. United States, 365 F.3d 1345, 1353 (Fed. Cir. 2004). A court “must consider the

solicitation as a whole, interpreting it in a manner that harmonizes and gives reasonable meaning

to all of its provisions.” Id. The terms of the solicitation are “ambiguous only if [the] language

is susceptible to more than one reasonable interpretation.” Id.

Although the SOW did not define “HLS element,” it did define “HLS”: