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  • AWS Survives Review Process to Win NSA Contract

    AWS Survives Review Process to Win NSA Contract

    AWS has won a major contract with the National Security Agency (NSA), after the contract award came under review.

    AWS was awarded a $10 billion contract with the NSA, but Microsoft immediately challenged the award, much as AWS had challenged Microsoft winning a major contract with the Department of Defense. According to FedScoop, the Government Accountability Office (GAO) instructed the NSA to review the bid after concerns in how Microsoft’s bid was evaluated. Despite the review, the NSA has once again awarded AWS the win.

    “NSA recently awarded a contract to Amazon Web Services that delivers cloud computing services to support the Agency’s mission,” said an NSA spokesperson. “This contract is a continuation of NSA’s Hybrid Compute Initiative to modernize and address the robust processing and analytical requirements of the Agency.”

    “We’re honored that after thorough review, the NSA selected AWS as the cloud provider for the Hybrid Compute Initiative, and we’re ready to help deliver this critical national security capability,” said an AWS spokesperson.

  • Federal Judge Shuts Down Blue Origin’s Lawsuit Against NASA

    Federal Judge Shuts Down Blue Origin’s Lawsuit Against NASA

    Blue Origin has been dealt a major blow, with a federal judge ruling against its suit aimed at forcing NASA to reconsider its bid.

    NASA solicited bids from multiple companies to build its next lunar lander. Despite initially signaling that it preferred to use multiple vendors, the agency ultimately decided on an exclusive contract with SpaceX due to cost concerns. SpaceX’s proposal scored higher and cost roughly half of Blue Origin’s.

    Blue Origin challenged the decision with the Government Accountability Office (GAO) and then sued when the GAO refused to overturn NASA’s decision. Subsequent documents revealed that Blue Origin made a risky gamble, counting on NASA accepting its bid and then renegotiating a better price, or getting more funding from Congress.

    According to The Washington Post, a federal judge has ruled against Blue Origin’s suit, paving the way for NASA to move forward with SpaceX’s proposal. Despite the repeated setbacks, Blue Origin said in a statement that it will continue to press the case.

    At this juncture, it’s once again worth pointing out Blue Origin founder Jeff Bezos’ previous comments about how fast and efficiently procurement worked for the original Apollo missions, and how different it is now.

    “Today there would be three protests and the losers would sue the federal government because they didn’t win…the thing that slows things down is procurement…it’s become the bigger bottleneck than the technology.”

    Bezos should know…

  • NASA: Blue Origin ‘Gambled’ On Its Proposal and Lost

    NASA: Blue Origin ‘Gambled’ On Its Proposal and Lost

    More details are emerging about Blue Origin’s losing bid for NASA’s lunar lander, and it appears the company made a risky gamble that backfired.

    Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin were two of the companies bidding for a contract to provide NASA’s new lunar lander. SpaceX ultimately won the contract, coming in substantially cheaper than Blue Origin’s bid. Blue Origin appealed NASA’s decision to the US Government Accountability Office (GAO), and then sued the government when the GAO upheld NASA’s decision.

    More details have emerged, and it appears Blue Origin shot for the moon (pun intended), basing their bid on the belief that NASA would accept the higher bid and then negotiate a lower price after the fact.

    The company “made an assumption about the Agency’s HLS budget, built its proposal with this figure in mind, and also separately made a calculated bet that if NASA could not afford Blue Origin’s initially-proposed price, the Agency would select Blue Origin for award and engage in post-selection negotiations to allow Blue Origin to lower its price. All of these assumptions were incorrect,” the four NASA attorneys wrote in the Agency Report, according to The Verge. “Realizing now that it gambled and lost, Blue Origin seeks to use GAO’s procurement oversight function to improperly compel NASA to suffer the consequences of Blue Origin’s ill-conceived choices.”

    Because that’s totally how bidding usually works: Accept an overpriced bid, that didn’t score as high as the competitor’s, and then negotiate with the winning bidder in the hopes they’ll offer a lower price after they’ve already won. Or at least that appears to be how Blue Origin thinks bidding should work.

    This isn’t the first time one of Jeff Bezos’ companies has overbid, lost a contract and they cried foul. Microsoft accused Amazon of doing the same thing when it sued after losing out on the Pentagon’s JEDI contract, saying Amazon used the litigation process to see the particulars of Microsoft’s sealed bid and then lowered its own to be more competitive.

    Interestingly, Bezos’ companies seem to be aware of the reputation they’re building — as sore losers that resort to litigation to compensate for overpriced bids — as Amazon “sent The Verge an unsolicited 13-page list” of legal actions it says SpaceX has taken over the years, in what appears to be an effort to prove it’s no more litigious than the next company.

    Ultimately, NASA said it best: “Blue Origin made a bet and it lost.”

  • Blue Origin Losing Top Talent to Rivals

    Blue Origin Losing Top Talent to Rivals

    On the heels of losing out on a major NASA contract, Blue Origin is also losing some of its top talent to its rivals.

    SpaceX beat out Jeff Bezos’ Blue Origin in a bid for NASA’s contract for a lunar lander. NASA had originally wanted to source multiple companies, but went with SpaceX exclusively due to budgetary constraints. Blue Origin appealed the decision, an appeal that was denied by the Government Accountability Office (GAO). Blue Origin filed a lawsuit against NASA in hopes of overturning the decision.

    According to Gizmodo, however, some of Blue Origin’s top talent are already leaving the company. Nitin Arora, lead engineer for the company’s lunar lander program, has left for SpaceX — an especially bitter blow given Blue Origin’s loss to the company. Lauren Lyons has moved on to become COO at Firefly Aerospace, and former astronaut Jeff Ashby, as well as Steve Bennet, have also left.

    Whatever the outcome of Blue Origin’s lawsuit, the company’s bigger issue may be keeping morale up and top talent in-house.

  • Deja Vu: Another Bezos Company Sues Government Over Losing a Bid

    Deja Vu: Another Bezos Company Sues Government Over Losing a Bid

    Blue Origins is suing NASA over a failed bid to participate in the agency’s lunar contract, continuing a proud tradition of litigation when losing.

    Bezos other company, Amazon, made headlines when it sued over losing out to Microsoft in a bid for the Pentagon’s $10 billion JEDI contract. Microsoft accused Amazon of using the suit as a way to gain access to Microsoft’s bid, and then lowering its own to match, essentially doing an end-run around the blind bidding process.

    Ultimately, despite initial rulings upholding the Pentagon’s contract award, Amazon kept the contract tied up so long that the Pentagon was forced to abandon it in the interests of being able to move forward and modernize its IT infrastructure. This decision was reached despite those initial rulings displaying that Microsoft clearly offered the better value.

    It appears Bezos is following the same strategy in the space race, launching a lawsuit to compensate for an inferior bid. His Blue Origin company is one of the prime competitors to Elon Musk’s SpaceX. Both companies were bidding on NASA’s contract for a lunar lander. Initially, NASA had expressed interest in having two companies produce competing products, but was forced to choose a single one due to budgetary constraints, ultimately going with SpaceX’s bid. 

    Bezos’ company took multiple steps to get back in on the action, offering to waive $2 billion in fees and appealing the decision with the US Government Accountability Office (GAO). Blue Origin argued in the appeal that since NASA had previously — under a broad agency announcement (BAA) — said it preferred to award the contract to two companies, it should be forced to do so, especially since Blue Origin wasn’t allowed to modify or lower its original bid.

    The GAO denied the appeal, emphasizing that NASA properly notified the bid participants of the ground rules:

    We deny the protests because the BAA expressly put all offerors on notice that the number of awards was subject to available funding and the agency could make multiple contract awards, a single award, or no award at all

    SpaceX and Blue Origin were rated “Acceptable” in the “Technical” portion of the bid (with a third, Dynetics, rated “Marginal”). However, SpaceX was the clear winner in the “Management” section of their bid, receiving an “Outstanding” grade to Blue Origin’s “Acceptable.” Even more telling was the price difference, with SpaceX coming it at $2,941,394,557, compared to Blue Origin’s whopping $5,995,463,651. Even accounting for Bezos’ willingness to waive $2 billion, Blue Origin’s base price was still $1 billion higher, with a less impressive “Management” grade.

    It’s clear why the Source Selection Authority chose SpaceX (clear, perhaps, to everyone but Bezos). SpaceX had the higher rating in “Management” and “also had, by a wide margin, the lowest initially-proposed price.”

    Needless to say, Bezos’ strategy isn’t winning much admiration.

    Still others on Twitter were quick to reference an interview Bezos did, describing how quickly the original lunar lander project moved forward and the contract awarded to the winning company. Bezos even said in that interview: “Today there would be three protests and the losers would sue the federal government because they didn’t win…the thing that slows things down is procurement…it’s become the bigger bottleneck than the technology.”

    Well said Jeff Bezos, well said. Now go back to litigating your losing bid.

  • Social Security Administration Overpayments Reach $1.3 Billion

    A new study recently released by the US Government Accountability Office (GAO) claims that the Social Security Administration has paid an estimated $1.3 billion in disability insurance benefits to thousands of people who might not have been eligible to receive them.

    The GAO estimates that 36,000 workers received improper disability payments between December 2010 and January 2013.

    According to the study findings, the overpayments may have happened for one of two reasons.

    First, to become eligible for disability insurance payments, potential recipients must go through a five month waiting period designed to insure that their disability is truly long-term. During this time, their earnings must not exceed $1,000 during any given month. The GAO study indicates that many who were receiving disability benefits had income that exceeded this limit.

    Second, once a disabled worker qualifies for benefits, they can take advantage of a trial work period that allows them to return to work for up to nine months while still receiving disability benefits. The GAO study found that many were receiving benefits long after the nine month trial period had ended.

    The Social Security Administration insists that its accuracy rate for making disability payments is 99%. But a spokesperson acknowledged that “even small errors cost taxpayers” and promised that not only would the agency investigate the matter, but it would take efforts to recoup erroneously-made payments from beneficiaries.

    The GAO report sparked controversy at a time when the long-term viability of the Social Security Administration, and specifically its disability program, has been questioned. Earlier this year, a government study estimated that the government disability trust fund will run dry by the year 2016. The government could divert funds from the retirement system, but since the social security fund is estimated to face insolvency by 2033 – three years earlier than prior estimates – that fix isn’t overly attractive to analysts or taxpayers.

    Often referred to as the “congressional watchdog,” the GAO is an independent and nonpartisan arm of Congress charged with monitoring and investigating how the federal government spends tax dollars. It is headed by the President-appointed Comptroller General of the United States.

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