NASA May Face Protest Over Recent Commercial-Cargo Contract

LOS ANGELES -- A possible contract squabble threatens to complicate U.S. government plans to rely on commercial-cargo operators who would launch rockets to supply the International Space Station early in the next decade.

A contractor team led by startup PlanetSpace Inc., which includes Boeing Co., Lockheed Martin Corp. and Alliant Techsystems Inc. is considering filing a protest over a contract worth as much as $1.9 billion that was awarded last month to Orbital Sciences Corp., according to people familiar with the details.

NASA chose Orbital's proposed commercial-cargo transportation system to provide eight launches. Contracts worth up to another $1.6 billion are slated to go to Space Exploration Tenchnologies, The issue is important for NASA because it is betting that Orbital and SpaceX, as the other winner is knows, will quickly develop new and reliable rockets to reach the orbiting space station.

The losing bidder hasn't made a final decision, and the National Aeronautics and Space Administration is slated to brief competitors as early as next on the reasons behind its decision. But PlanetSpace officials, according to these people, already are consulting with lawyers and believe they may have legal grounds to challenge the agency's selection.

A NASA source selection panel ranked Orbital's overall proposal and its projected costs less favorably than bids submitted by the PlanetSpace team and a third bidder, Space Exploration Technologies Inc, according to one person familiar with the details.

But William Gerstenmaier, the senior agency official who made the decision, opted to go against those rankings, according to people familiar with the details. Mr. Gerstenmaier, for example, disregarded the management strengths the selection board said stemmed from the participation of Boeing and Lockheed. Instead, NASA in the end cited PlanetSpace's "complete lack of experience as a prime contractor," according to documents provided to the bidders. The agency effectively decided against the PlanetSpace team because of Mr. Gerstenmaier's doubts about its ability to manage technical risks and deliver what it promised .

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