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NASA has chosen Elon Musk's SpaceX to create spacecraft that will return humans to the moon.

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The space agency deviates from practice by awarding a $2.9 billion contract to a single corporation in a "significant move" toward a moon-to-Mars plan.

Nasa has selected SpaceX to design the next-generation spacecraft that will return humans to the moon, bolstering Elon Musk's hold on the emerging public-private space industry.

On Friday, Nasa announced a $2.9 billion contract to develop the lunar lander that will spearhead the Artemis program, the agency's ambitious project to return to the moon for the first time since the final Apollo mission in 1972

“The Artemis lunar landing is a critical component of our moon-to-Mars strategy,” acting Nasa administrator Steve Jurczyk told reporters.

“Today is a significant move forward. This is a fantastic time to be interested in human discovery for the benefit of all humanity.”

Musk's company is the only one capable of launching astronauts from American soil. However, Nasa's decision to use a single contractor for its human landing system (HLS) raised some eyebrows.

Traditionally, the department has opted to keep at least two vendors on the payroll to stimulate competition and guard against setbacks.

This time, Nasa opted to deny proposals from Amazon tycoon Jeff Bezos' Blue Origin, a collaboration with Lockheed Martin, Northrop Grumman, and Draper, and defense contractor Dynetics, citing budgetary concerns.

All three bids were selected for the HLS project's preliminary stages in 2020. “Congratulations to SpaceX, but I'm frankly surprised Nasa is going with a single provider here,” said Casey Dreier, senior space policy advisor, in a tweet.

“Of course, SpaceX behaves as though it were constantly competing with itself. So far, it has fully fulfilled its capacity and price promise.”

Dreier estimated that "if SpaceX pulls this off, the United States will get a human-capable lunar landing system for 13% the price of Apollo-era hardware."

The Space Launch System, the most powerful rocket ever designed, and the Orion spacecraft, which will ferry crews, are both parts of the Artemis program.  

The Starship landing system, which is currently in progress, is included in SpaceX's bid.

According to Nasa, the Artemis program would place the first woman and person of color on the moon.

The Trump administration ordered the agency to meet the target by 2024, but the deadline was pushed back due to budget cuts.

Joe Biden's proposal to Congress, released earlier this month, seeks $24.7 billion for NASA, a 6.3 percent increase over the previous year, including $6.9 billion for Artemis.

Since the space shuttle fleet was retired in 2011, the United States was unable to send humans into space for nine years.

Now, SpaceX is pushing forward with its human spaceflight program. It has sent two crews to the International Space Station since May 2020. Crew 2, the third mission, is scheduled to launch on April 22.