Jeff Bezos offers Nasa $2bn discount for lunar contract

Space exploration updates

Sign up to myFT Daily Digest to be the first to know about Space exploration news.

Jeff Bezos’s Blue Origin has offered to cover $2bn in costs in exchange for being awarded a Nasa contract to help land astronauts on the moon.

In April, Nasa selected Elon Musk’s SpaceX for the programme, citing budgetary constraints. The agency had initially said it would award the contract to two suppliers in order to foster competition.

Blue Origin had led a coalition of companies, dubbed the National Team, in bidding for the contract, which aims to send Americans back to the lunar surface by 2024. The mission intends to include the first woman, and first person of colour, to make the journey.

However, Nasa said the other bidders were beaten on cost by SpaceX by a “wide margin”. The contract awarded was worth $2.89bn.

In a letter to Bill Nelson, the US space agency’s administrator, Bezos said his company would waive $2bn for the current and next two government fiscal years, as well as fund a demonstration mission, to “get the program back on track right now”.

“This offer is not a deferral, but is an outright and permanent waiver of those payments,” Bezos wrote in the letter. “This offer provides time for government appropriation actions to catch up.”

The Bezos letter comes a week after Blue Origin successfully carried out its first manned flight to the edge of space. The company has booked almost $100m in ticket sales for future flights, Bezos said during a press conference. During the same event, Bezos was criticised after saying the trip had been paid for by “every Amazon employee and every Amazon customer”.

In Monday’s letter, Bezos repeated Blue Origin’s complaint that it had not been given a chance to revise the cost of its bid for the Nasa contract, arguing that as a result, SpaceX had been given a “multiyear, multi-billion-dollar head start”.

“Instead of this single source approach, Nasa should embrace its original strategy of competition,” Bezos wrote.

“Competition will prevent any single source from having insurmountable leverage over Nasa. Without competition, a short time into the contract, Nasa will find itself with limited options as it attempts to negotiate missed deadlines, design changes, and cost overruns.”

A spokesperson for Nasa said the agency was “aware” of Bezos’s letter but could not comment, citing the ongoing appeal over the initial contract award. The Government Accountability Office is expected to deliver its ruling early next month.

In June, the Senate passed the Endless Frontier Act, which included additional $10bn funding for the Human Landing System programme, explicitly with the purpose of increasing competition. Opposing the provision, Senator Bernie Sanders called it a “multibillion-dollar Bezos Bailout”.