New Glenn rocket rendition. Credit: Blue Origin

WASHINGTON — The U.S. Government Accountability Office agreed with Blue Origin that the rules set by the Air Force for its ongoing procurement of launch services do not allow for a fair and open competition.

Though the decision is still under seal, Kenneth Patton, managing associate general counsel for procurement law at GAO, said in a statement that the agency on Nov. 18 sustained the protest Blue Origin filed Aug. 12.

GAO’s ruling was first reported by Bloomberg News.

In a “pre-award” protest, Blue Origin challenged the terms of a request for proposals (RFP) issued by the Air Force earlier this year for the National Security Space Launch (NSSL) Phase 2 Launch Service Procurement, which aims to award two contracts next year expected to cover 30 or more medium- and heavy-lift satellite launches the Air Force plans to conduct between 2022 and 2026.

Blue Origin, owned by founder Jeff Bezos,  is one of four companies that submitted bids for the contracts by the Air Force’s Aug. 1 proposal deadline. The other three companies bidding for the contracts are Northrop Grumman and incumbents United Launch Alliance and SpaceX.

After submitting its bid, Blue Origin filed a formal protest with the GAO arguing that several terms of the RFP unduly restrict competition, are ambiguous, or are inconsistent with customary commercial practice.  

The GAO agreed.“GAO sustained the protest, finding that the RFP’s basis for award is inconsistent with applicable procurement law and regulation, and otherwise unreasonable,” Patton said in the statement.

According to the Air Force’s RFP, the government will make the two awards by deciding which combination of two independently developed proposals offers the best value to the government.

This methodology “does not provide a reasonable, common basis on which offerors will be expected to compete and have their proposals evaluated,” Patton wrote. “GAO recommends that the agency amend the solicitation.”

Blue Origin also challenged other provisions of the solicitation where GAO sided with the Air Force. “GAO found that the other challenged provisions were reasonable and in accordance with applicable procurement law and regulation, and therefore denied those protest allegations,” Patton said.

The statement says GAO’s decision “expresses no view as to the merits of the proposals that have been or will be submitted.”

GAO’s bid protest process only examines whether procuring agencies have complied with procurement laws and regulations.

The Nov. 18 decision was issued under a protective order because it may contain proprietary and source selection sensitive information. GAO has directed the parties to promptly identify information that cannot be publicly released so that GAO can prepare and release a public version of the decision.

Blue Origin CEO Bob Smith in a statement said GAO’s decision recognizes “the importance of ensuring evaluation criteria that are unambiguous and comply with federal procurement statutes and regulations.”

Smith said Blue Origin “remains committed to our long-term partnership with the Air Force and to working with them as they address the GAO’s recommendations [and] incorporate the GAO’s feedback during the LSP source selection.”

Air Force spokeswoman Ann Stefanek said in a statement that the Air Force “values GAO’s role in helping ensure the fairness and integrity of the procurement process.”

The Air Force is “pleased that GAO has validated the Air Force’s fundamental acquisition strategy and source selection approach for the National Security Space Launch Phase 2 Service Procurement,” said Stefanek. “The Air Force is reviewing the single ground of protest sustained by the GAO and expects to resolve this issue definitively and expeditiously. The Air Force remains confident in its acquisition strategy and Phase 2 contract award in the third quarter of FY20.”

Sandra Erwin writes about military space programs, policy, technology and the industry that supports this sector. She has covered the military, the Pentagon, Congress and the defense industry for nearly two decades as editor of NDIA’s National Defense...