Sierra Nevada’s challenge of $6.8 billion NASA contract award rejected

Sierra Nevada Corp.’s efforts to get its Dream Chaser spacecraft back in NASA’s Commercial Crew Program took a major hit Monday when the U.S. Government Accountability Office denied a bid protest filed by SNC in September.

SNC, which bases its Space Systems division in Louisville, had challenged NASA’s award of $6.8 billion in contracts to Boeing Co. and Space Exploration Technologies to ferry astronauts to the International Space Station, arguing that NASA had put undue emphasis on certain aspects of the three companies’ proposals.

Among other things, according to the GAO, Sierra Nevada believed NASA departed from its stated evaluation and selection criteria “by significantly elevating NASA’s stated goal of obtaining an integrated crew transportation system by the end of 2017, and by failing to put offerors on notice that the agency’s goal would be central to the evaluation and selection decision.”

“The GAO disagreed with Sierra Nevada’s arguments about NASA’s evaluation, and found no undue emphasis on NASA’s consideration of each offeror’s proposed schedule, and likelihood to achieve crew transportation system certification no later than 2017,” Ralph White, GAO managing associate general counsel for procurement law, wrote in a statement. “GAO also noted that, contrary to Sierra Nevada’s assertions, the RFP clearly advised offerors that their proposals would be evaluated against the goal of certification by the end of 2017.”

Sierra Nevada officials offered little comment Monday other than to issue a statement in which they vow to “further development and testing of Dream Chaser.”

“At this stage SNC is evaluating the GAO decision,” the SNC statement read. “While the outcome was not what SNC expected, we maintain our belief that the Dream Chaser spacecraft is technically very capable, reliable and was qualified to win based on NASA’s high ratings of the space system. We appreciate the time and effort contributed to this process by the GAO and NASA to fully evaluate such a critical decision for the United States.

“The company is privileged to have been part of NASA’s Commercial Space Program since its inception over 8 years ago. SNC remains fully committed to being a part of returning world-class human spaceflight and enhanced cargo capabilities to low-Earth orbit.”

The GAO decision took no position on the merits of the three companies’ commercial crew proposals, but instead reviewed the NASA decision to determine if its conclusions in the award process were “reasonable and consistent with the evaluation approach NASA set out in its solicitation.” Had the GAO sided with SNC, it would not necessarily have meant an award of any type for the company. But the GAO could have required NASA to re-evaluate its decision-making process, potentially leading to changes in the awards.

The GAO did not release its full decision publicly Monday because it contains information proprietary to the companies involved, instead releasing the statement from White. Once the companies submit proposed redactions to the full document, the GAO will release a public version, likely in a few weeks.

SNC had previously been awarded $227.5 million from NASA in commercial crew funding, and was one of three companies developing spacecraft under the program along with Boeing and SpaceX. SNC had planned an unmanned test flight of Dream Chaser to low-Earth orbit in November of 2016, with a manned flight to follow in 2017. But the GAO statement indicates that NASA either wasn’t confident in or satisfied with SNC’s timeline, even though SNC’s bid price was more than $450 million less than Boeing’s. SNC spokeswoman Krystal Scordo said in an email that the company had proposed full system certification by 2017 as required by NASA.

According to the GAO, Sierra Nevada had proposed Dream Chaser – a reusable vehicle launched aboard a United Launch Alliance Atlas 5 rocket that can be landed on normal runways – at a price of $2.55 billion. Boeing’s CST-100 space capsule, which would land using parachute and airbag systems, was presented at a price of $3.01 billion. SpaceX’s Dragon capsule, which would use propulsive soft landing systems, was priced at $1.75 billion.

Boeing ultimately was awarded  $4.2 billion, while SpaceX was awarded $2.6 billion. Those contracts cover development and certification of the spacecraft and six missions each, as well as other studies, NASA officials said at the time.

In addition to the argument about the 2017 delivery date, SNC officials stated in September that they felt price wasn’t adequately considered by NASA given that the request for proposal had listed price as the most important factor. But it appears that NASA also traded off some consideration of price in favor of reliability.

“In making its decision,” the GAO’s White wrote Monday, “NASA concluded that the proposals submitted by Boeing and SpaceX represented the best value to the government. Specifically, NASA recognized Boeing’s higher price, but also considered Boeing’s proposal to be the strongest of all three proposals in terms of technical approach, management approach, and past performance, and to offer the crew transportation system with most utility and highest value to the government.”

After the CST-100, White went on to note that NASA saw favorable features in both SNC’s and SpaceX’s spacecraft but “concluded that SpaceX’s lower price made it a better value than the proposal submitted by Sierra Nevada.”

The GAO decision also notes that SNC argued that NASA didn’t properly evaluate realism of SpaceX’s price and financial resources, mission suitability of the three spacecraft or relevance of the three companies’ past performance. But the GAO concluded that such arguments were not supported by NASA’s evaluation record.

The competition to build a spacecraft that could ferry astronauts to the ISS ramped up in particular after NASA retired the space shuttle fleet in 2011. NASA has been relying on the Russians to get American astronauts to the space station at a cost of $71 million per seat ever since. It was widely expected that more than one company would be chosen for the next round of commercial crew funding.

When they made the award to Boeing and SpaceX in September, NASA officials noted that the new contract includes an “onramp clause” that allows the agency to look at adding other capabilities at a future time, meaning other companies could be brought into the mix at a future time.

Sierra Nevada, meanwhile, has looked to other possibilities for Dream Chaser. Because Dream Chaser is designed for both manned and autonomous flight, SNC is vying for a piece of NASA’s next commercial cargo contracts that could award around $14 billion to multiple companies to send supplies to the space station. The company is reviewing the date of its 2016 test flight in conjunction with its NASA cargo proposal.

SNC has also been building alliances with space agencies in other countries to collaborate on the development of Dream Chaser. Dream Chaser is touted as a versatile vehicle that could transport cargo to space, deploy satellites and collect space debris, in addition to shuttling astronauts. SNC announced a Global Project initiative in the fall that it intends to provide manned space flight capabilities for smaller countries that don’t have the infrastructure for such programs of their own.

“SNC firmly believes that the Dream Chaser will play a central role in shaping the future of space transportation with its unique capabilities which address a wide spectrum of needs,” the company’s Monday statement said.

Despite the alternative options, SNC laid off about 90 employees from its Dream Chaser program after NASA’s commercial crew decision.

SNC’s bid protest with the GAO led to an automatic work stoppage on the commercial crew program by Boeing and SpaceX. But NASA instructed the companies to resume work a couple of weeks later, and a subsequent request for an injunction to force NASA to order another work stoppage was rejected by a federal court.

Monday’s decision essentially exhausts SNC’s options with the GAO, though the company could file suit with the U.S. Court of Federal Claims to hear its protest of NASA’s bid process. Company officials stated last fall that they originally decided to go the GAO route because it provided a quicker path to resolution, for better or for worse, so that the commercial crew program could continue. Scordo said in her email that SNC is still reviewing the GAO decision, and any additional action the company might take would be released in a future statement.

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