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No, the U.S. Senate isn’t trying to give Blue Origin a 'bailout'

The Senate wants to give NASA additional money to maintain goals for a program that relies on private companies. Blue Origin is just one of those companies.
Credit: AP
FILE - In this image from video made available by Blue Origin, the New Shepard rocket lifts off during a test in West Texas on Wednesday, April 14, 2021. (Blue Origin via AP)

The United States Senate spent much of May working on the United States Innovation and Competition Act, commonly referred to as the Endless Frontier Act, a bill intended to boost the federal government’s science funding. The Senate passed it June 8, meaning it goes to the House of Representatives next. 

One section within the bill, which would give NASA $10 billion in funding for human space exploration, came under criticism because of the perceived beneficiary of the funding: Blue Origin, a space exploration company owned by billionaire Amazon founder Jeff Bezos.

Senator Bernie Sanders told the media in late May, “It does not make a lot of sense to me that we would provide billions of dollars to a company owned by the wealthiest guy in America.” Viral social media posts echoed his complaints, referring to the section as a “bailout” for Blue Origin.

THE QUESTION

Is the U.S. Senate attempting to give Blue Origin, owned by billionaire Jeff Bezos, a $10 billion bailout?

THE SOURCES

THE ANSWER

This is false.

No. Although NASA recently chose SpaceX over Blue Origin and one other company to receive funding for development of a human lunar lander, NASA stated in its decision that it wanted to fund two companies but lacked the budget to even fund one without negotiating the price down.

The Senate bill is in response to that, allocating NASA enough funding to award a second contract. Blue Origin is the likely frontrunner for that contract, but it’s not guaranteed. Even if Blue Origin does win the contract, the allocated $10 billion to NASA isn’t just for this contract and therefore wouldn’t all go to Blue Origin.

WHAT WE FOUND

The funding bill passed the Senate alongside the rest of the U.S. Innovation and Competition Act of 2021. The section that’s been referred to as a “bailout” for Blue Origin can be found between pages 499 and 501 of the bill.

It grants NASA more than $10 billion over the next five years for the agency’s Artemis program and requires NASA maintain “competitiveness within the human landing system program by funding design, development, testing, and evaluation for not fewer than 2 entities.” It also says NASA cannot “modify, terminate, or rescind any selection decisions or awards made under the human landing system program that were announced prior to the date of enactment of this division.”

NASA's Artemis program is a partnership with private businesses with the goal to land Americans on the moon for the first time since the Apollo missions (1961-1972).

In mid-April, NASA announced it had awarded SpaceX a contract over Blue Origin and Dynetics to continue development of the first commercial human lander to be used in the Artemis program. The contract award was for $2.89 billion. 

But in a document explaining how and why NASA made its decision, NASA indicated it wished it wasn’t limited to awarding just one contract.

“This decision was based on NASA’s longstanding Option A acquisition strategy of making two Option A contract awards,” Kathryn Lueders, NASA’s source selection authority, wrote. “While it remains the Agency’s desire to preserve a competitive environment at this stage of the [Human Landing System] Program, at the initial prices and milestone payment phasing proposed by each of the Option A offerors, NASA’s current fiscal year budget did not support even a single Option A award.”

According to Lueders, that led NASA to move forward with the lowest bid, SpaceX, to negotiate the price down to something that might be closer to NASA’s budget. According to a filing from Blue Origin, their contract was estimated to cost $5.99 billion — more than twice SpaceX’s revised bid.

In other words, NASA didn’t have the budget to offer contracts to two different companies, even though it wanted to. So it picked the lowest bidder, SpaceX, as a starting point. But the agency hasn’t entirely given up on making a second contract possible.

NASA first requested increased funding for the Artemis program prior to the bill’s introduction in the Senate. The agency specified its desire to “maintain competition to lower the cost and reduce the risk” for future partnerships in a more detailed request later. It's a strategy NASA has previously used in commercial partnerships.

The Senate bill allocates $10 billion to NASA over the next five years for the “human landing system program.” That means the money is also for future human landing system contracts, which NASA has previously indicated it may need.

So even if Blue Origin wins the contract, which isn’t guaranteed, it won’t get all $10 billion.

The details of the bill aren’t necessarily final yet. It goes to the House of Representatives next, who may make changes before passing it with a vote. Once it passes the House, it goes to President Biden’s desk for his signature to become law.

More from VERIFY: National debt clocks are estimates of total federal debt, not official calculations

VERIFY

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