NASA Orders SpaceX to Pause Work on Lunar Lander as New Details of Dispute Emerge

In mid-April, NASA selected SpaceX to develop the Human Landing System (HLN) that will land human crews on the Moon as part of its Artemis program. Since then, competitors Blue Origin and Dynetics have filed disputes with the Government Accountability Office (GAO), claiming that NASA had made errors that may have cost them the contract. Both competing companies had submitted their own lunar lander design for consideration.

NASA has now ordered SpaceX to pause work on the Starship-derived lunar lander design until it can be resolved, which means that the first installment of the $2.89 billion price tag could also be delayed. The space agency had originally planned to cut only one company from consideration in the last down-select round, but chose to go with only SpaceX instead due to budget cuts.

Blue Origin’s proposal would have come with a price tag of $5.99 billion. Its complaint includes allegations that NASA allowed SpaceX to revise its price estimates, but did not allow Blue Origin and Dynetics the same courtesy. It also complained that NASA “moved the goalposts” at the last minute and erred in selecting only one company when it so recently planned to select two.

Dynetics made similar allegations in its dispute, saying that NASA selected “the most anti-competitive and high-risk option available.” Its complaint noted that four Starship prototypes have exploded during high-altitude tests in recent months, even though SpaceX has modified the SN15 prototype based on data from the tests. SpaceX plans to conduct the first test flight of SN15 within the next few days. According to Dynetics, however, this is not yet enough to justify the selection of a lunar landing system that appears to be derived from the Starship rocket.

“NASA failed to consider the risks inherent in SpaceX’s technical approach and, more specifically, information too close at hand for NASA to ignore. … NASA has given SpaceX a pass on its demonstrable lack of such systems engineering,” Dynetics said in its complaint.

It is interesting to note that SpaceX is currently the only aerospace company to have flown actual crews to the International Space Station under a Commercial Crew contract, which may be a not-so-subtle factor in NASA’s selection for the HLN. The Crew-2 mission recently docked to the International Space Station and Crew-1 is expected to return to Earth early Sunday morning (Eastern time). The Crew-2 mission reuses the Crew Dragon that was previously used by the Demo-2 test flight and also reused a Falcon 9 first stage booster.

NASA also selected SpaceX to launch the first components of the Lunar Gateway, which can host crews and provide logistical support during crewed missions to the lunar surface. SpaceX also has a contract to launch the Astrobotic Lunar Lander and NASA VIPER Rover, as well as lunar landers for Intuitive Machines.

While the Government Accountability Office has yet to issue a ruling, SpaceX may have had an advantage on the lunar lander competition, considering that it has a solid record for conducting launches under NASA contracts and Blue Origin has not yet sent anything into orbit. Amazon had to tap the United Launch Alliance to launch the first “Project Kuiper” Internet satellites even though Jeff Bezos is a backer of both companies. Dynetics is a relatively unknown company. So it may be no surprise that NASA decided to go with a proven performer even with its current issues with the Starship rocket.