Bezos offers to cover $2 billion in NASA costs in exchange for astronaut lunar lander contract

Blue Origin founder Jeff Bezos on Monday offered to cover billions of dollars of costs in exchange for a NASA contract to build a lunar lander to land astronauts on the moon.

Bezos said Blue Origin would waive all payments up to $2 billion from the National Aeronautics and Space Administration in the current and next two government fiscal years. Blue Origin would also fund its own pathfinder mission to low-Earth orbit, according to the letter. In return, the company requested a fixed-priced contract from the government agency.

“This offer is not a deferral, but is an outright and permanent waiver of those payments. This offer provides time for government appropriation actions to catch up,” Bezos said in an open letter to NASA Administrator Bill Nelson.

NASA in April awarded Elon Musk’s SpaceX with a sole $2.89 billion contract to build the next crewed lunar lander under its Human Landing Systems program. Before selecting the winner of the contest, NASA gave 10-month study contracts to SpaceX, Blue Origin and Dynetics to begin work on lunar landers.

“Instead of this single source approach, NASA should embrace its original strategy of competition,” Bezos said. “Without competition, a short time into the contract, NASA will find itself with limited options as it attempts to negotiate missed deadlines, design changes, and cost overruns.”

Bezos, the founder and executive chair of Amazon, launched into space earlier this month with a ride on the first crewed New Shepard rocket flight, a project of his Blue Origin company.

He and his fellow passengers floated in microgravity for a couple of minutes before their capsule returned and landed after 10 minutes and 10 seconds.

The New Shepard launch represented a milestone in its progress toward his vision to create “a future where millions of people are living and working in space to benefit Earth.”

Right now, Bezos and fellow billionaire Richard Branson are the only two major entrepreneurs in the market of launching tourists to the edge of space. Branson’s Virgin Galactic, which also recently completed a crewed flight, has historically sold seats on its flights between $200,000 and $250,000 per ticket.

The tourism market is just one component of a space economy valued no less than $420 billion. Yet its high profile means it has a powerful and widespread influence over the space industry, with investors often pointing to astronaut flights as driving excitement about the broader consequences of the extraterrestrial marketplace.

Blue Origin has sold nearly $100 million worth of tickets for future passenger flights to the edge of space, Bezos said last week. The company is actively working on building more rocket boosters to fly more frequently at the “very high” rate Bezos hopes for.

— CNBC’s Michael Sheetz contributed reporting.