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How Blue Origin is trying to rework the rules of the Air Force’s coveted rocket competition

On Monday, August 12th, aerospace company Blue Origin filed a protest with the Government Accountability Office (GAO), arguing that the Air Force is running a “flawed” competition to pick the agency’s next round of launch providers for national security missions. There’s a good chance this last-ditch protest could change the terms of the competition before final selections are made, but shifting the rules in favor of Blue Origin won’t guarantee that the company is chosen in the end.

The day that Blue Origin filed the protest was the same day that proposals were due for the Air Force’s Launch Service Procurement program. The initiative aims to select two rocket companies that will launch all of the Air Force’s missions to space from 2022 to 2026. The Air Force wants one company to support 60 percent of the launches, and the second will handle the other 40 percent. The contracts for these missions are potentially worth billions of dollars combined and could ultimately give them an edge in future Air Force competitions. Being selected as part of this program is a matter of life and death for some launch providers.

Four companies are officially competing for the coveted contracts, including Blue Origin, SpaceX, the United Launch Alliance (ULA), and Northrop Grumman. Three of these companies — all except SpaceX — received millions of dollars from the Air Force last year to further development of their vehicles. Those that aren’t selected will stop receiving their funding, raising the stakes for some in the competition, including Blue Origin.

Blue Origin’s argument is that the Air Force is limiting itself by choosing only two providers. “Unless the Air Force changes its approach, this procurement will perpetuate a market duopoly in national security space launch well into the next decade, causing higher launch prices, less assured access to space, and a missed opportunity to expand our national security interests and bolster U.S. leadership in space,” Blue Origin stated in a fact sheet about the protest.

Blue Origin also claims that the Air Force’s selection strategy favors the only two companies currently authorized to send military payloads into space. The first is ULA, which dominated national security launches for most of the 2000s. The other is SpaceX, which more or less forced its way onto the scene when it protested a major contract given to ULA in 2014. SpaceX received certification to launch national security payloads in 2015 and has flown numerous high-profile missions for the Department of Defense ever since.

Within the latest procurement, the Air Force specifies that companies can put forward a backup launch vehicle, along with a primary rocket, to put satellites into orbit. This puts Blue Origin at a disadvantage, the company argues, since it’s only bidding its future New Glenn rocket, which is supposed to fly for the first time in 2021. However, both SpaceX and ULA have backup options. SpaceX has both the Falcon 9 and Falcon Heavy, while ULA has its future Vulcan rocket, as well as the Atlas V it’s currently launching.

Ultimately, Blue Origin wants to change the structure of the procurement to give the company a leg up in the competition. Within the next 30 days, the Air Force can either file to dismiss Blue Origin’s protest or agree that changes need to be made. Then, Blue Origin will have a chance to respond to the Air Force’s reply. No matter what, Blue Origin’s protest must be resolved within 100 days of its filing, and the Air Force cannot make a final selection until the protest has been resolved. (That last point isn’t as much of an issue — the choice of the final two candidates is currently scheduled for spring of next year.)

The odds are pretty even that the company can enact some kind of change. Of the more than 2,600 protests the GAO received last year, 44 percent of them resulted in some kind of change from the government agency that the protester wanted. Either the agency decided on its own to make changes before the GAO came to a conclusion, or the GAO completed the case and recommend in favor of the protestor. However, the GAO doesn’t always side with the protestor. Only 622 protests went to a GAO decision last year, and 92 went in the protestor’s favor.

Even if the GAO does come to a decision that favors Blue Origin, it’s not guaranteed the Air Force will change anything. The GAO only issues recommendations to government agencies on what needs to change — it’s up to the agencies whether they follow them. But if the Air Force chooses to ignore the GAO’s decision, the GAO must notify Congress, which can then take up the matter with the executive branch.

Blue Origin has already appealed to its congressional representatives about the procurement. In March, Rep. Adam Smith (D-WA), chairman of the House Armed Services Committee — whose district includes Blue Origin headquarters — wrote a letter to then-Secretary of the Air Force Heather Wilson, urging her to delay the procurement. He argued that the current language in the procurement “risks undermining the Air Force’s goal of maximizing and sustaining fair and open competition,” according to Defense News.

Of course, it’s possible Blue Origin can wind up changing the procurement structure but still not be selected in the end. In the meantime, Blue Origin has still submitted a proposal while its protest is considered. But it’s not just Blue Origin pulling out all the stops to be selected. SpaceX also sued the US government in May, contesting the award of the Air Force’s development money it didn’t receive last year. When billions of military funding is at stake, it’s clear that competing companies will do everything they can to make sure the playing field is level.

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