Amazon (AMZN) - Get Amazon.com, Inc. Report founder Jeff Bezos suffered a setback to his goal of traveling to the moon as the U.S. Government Accountability Office denied a protest by his space company Blue Origin and Dynetics Inc. of NASA's award to Tesla (TSLA) - Get Tesla Inc Report founder Elon Musk's company SpaceX of a $2.9 billion contract for a human lunar landing system.
Blue Origin and Huntsville, Ala., Dynetics on April 26 filed a protest with the GAO after NASA awarded SpaceX the contract, asserting that NASA was required to make multiple awards consistent with its broad agency announcement that stated a preference for multiple awards. The companies said that NASA was required to open discussions, amend or cancel its broad agency announcement when it determined it had inadequate funding to support multiple awards.
The protest argued that "NASA unreasonably evaluated all three of the proposals" submitted by SpaceX, Blue Origin and Dynetics, and it improperly waived a mandatory solicitation requirement of SpaceX.
The GAO, however, concluded NASA did not violate procurement law or regulation when it decided to make only one award. It said NASA's announcement stated that the number of awards was subject to the amount of funding available for the program. NASA reserved the right to make multiple awards, a single award or no award at all, the decision said.
The government agency also said there was no requirement for NASA to discuss, amend or cancel the announcement as a result of the amount of funding available for the program.
The GAO agreed with the protesters that NASA waived a requirement for SpaceX in a limited instance, but the protesters could not establish that any reasonable possibility of competitive prejudice arising from the limited discrepancy in the evaluation, according to the decision.
Blue Origin, a space-tourism company founded by Bezos, completed a test flight on July 20 with a crew including Bezos, his brother Mark Bezos, aerospace pioneer Mary Wallace Funk and 18-year-old physics student Oliver Daemen.
Amazon shares on Friday closed down 7.5% at $3,327.59. Tesla stock rose about 1.5% to $687.20