A U.S. government watch agency has rejected an appeal by Jeff Bezos' space company, Blue Origin, over NASA's decision to award a lunar landing contract to Elon Musk's SpaceX.

Rejecting the protest, the Government Accountability Office said the space agency "did not violate the law or regulation of acquisitions" when it handed SpaceX the $2.89 billion deal to help send Americans back to the moon, possibly as soon as 2024.

The decision represents another blow to Bezos' ambitions to create a major space exploration company. Blue Origin has already suffered long delays in producing its own suborbital rocket to compete with the progress made by Musk.

Despite initially signaling its intention to award contracts to several vendors, NASA said in April it would go with the only one due to budget constraints. The agency said SpaceX's offering had been cheaper by a "wide margin" compared to the others.

Blue Origin, and another rejected supplier, Dynetics, protested Nasa's decision, arguing that the agency had reneged on its intention to use multiple vendors and failed to allow other companies to review the cost of their respective offerings.

In a statement released Friday, the GAO said, "NASA's announcement stipulated that the number of awards the agency would award was subject to the number of funds available for the program.

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"In addition, the ad reserved the right to award multiple prizes, a single prize or no prize at all." GAO is the investigative arm of the U.S. Congress and also reviews disputes related to government contracts.

The rejection comes days after Bezos wrote to NASA Administrator Bill Nelson offering to cover $2 billion in costs in this fiscal year and the next two, in exchange for being awarded the contract, a bid that still stands, Blue Origin said Friday.

"We stand firm in our belief that there were fundamental issues with NASA's decision," the company said. "But the GAO was unable to address them due to its limited jurisdiction. We will continue to advocate for two immediate suppliers as we believe it is the right solution."

The company said it was "encouraged" by congressional efforts to increase NASA's budget to allow it to award multiple contracts, as well as Nelson's recent comments on the importance of healthy competition in the modern space race.

Blue Origin added, "The Human Landing System program should have competition now rather than later; that's the best solution for Nasa and the best solution for our country."

NASA acknowledged the GAO's decision and said it would allow the agency to move forward with the SpaceX partnership. "We will continue to work with the Biden administration and Congress to secure funding for a robust and sustainable approach to the nation's return to the moon in a collaborative effort with U.S. trading partners," he said.

Lineesh Kumar

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