FLIR Systems, Inc., No. 3885 (February 16, 1994) Docket No. SIZ-93-12-13-134 UNITED STATES OF AMERICA SMALL BUSINESS ADMINISTRATION OFFICE OF HEARINGS AND APPEALS WASHINGTON, D.C. SIZE APPEAL OF: ) ) FLIR Systems, Inc. ) ) Appellant ) Docket No. SIZ-93-12-13-134 ) Solicitation No. ) N666044-93-R-C872 ) Department of the Navy ) Naval Undersea Warfare Center ) Newport, Rhode Island ) DIGEST A Petition for Reconsideration that fails to present "new ques tions raised by the decision concerning which the Petitioner had no previous opportunity to present evidence or argument," as required by the regulation at 13 CFR 121.1721(b), will be dismissed. ORDER DISMISSING PETITION FOR RECONSIDERATION February 16, 1994 BLAZSIK, Administrative Judge, Presiding: Jurisdiction This petition is decided under the Small Business Act of 1958, 15 U.S.C. 632 et seq. and the regulations codified at 13 CFR Part 121. Issue Whether the Petition for Reconsideration has presented sufficient grounds for reconsideration of the prior decision. Facts On January 4, 1994, we issued Size Appeal of FLIR Systems. Inc., No. 3870, in which we affirmed the Regional Office's determina tion that FLIR Systems, Inc. (Appellant) is an other-than-small business. The decision held that Appellant (the challenged firm below) had not rebutted the presumption set forth at 13 CFR 121.401(e) that minority shareholders owning substantially equal blocks of stock each control the firm. The facts showed that the Appellant had executed a shareholders' agreement with two of its largest shareholders, Louisiana-Pacific Venture Corp. (Louisiana) and Hughes Aircraft Company (Hughes), specifying that each of these two companies could appoint one director to Appellant's Board of Directors. This agreement was executed on December 7, 1993, a date after Appellant had self certified as a small business and after the Regional Office had issued its determina tion. In this connection, we held that events occurring after the date of a firm's self certification, except in rare circumstances not present here, could not be considered for purposes of determining a firm's size status. Accordingly, the decision distinguished the situation here from that prevailing in Size Appeal of Tri-Fuels. Inc., No. 3563 (1992), where we had found that a similar agreement to the one at issue here, that had been executed before self certification, could rebut the presumption of control set forth in the above regulation and thus eliminate the minority shareholders as affiliates for purposes of a size determination. 1/ On January 25, 1994, Appellant filed a timely Petition for Reconsideration pursuant to 13 CFR 121.1721(b). 2/ In its Petition, Appellant asserts that the shareholders' agreements executed on December 7, 1993, merely reduced to writing existing oral understandings with Louisiana and Hughes reached on June 22, 1993, well before Appellant's self certification as a small business. Appellant asserts that on June 22, 1993, it became a public company through an initial public offering of its shares. In anticipation of the initial public offering, Appellant entered into oral agreements with Louisiana and Hughes, whereby the two latter companies would reduce their representation on Appellant's Board of Directors from two directors each to one director each. Thus, Appellant notes, the oral agreements were in effect at the time of Appellant's self certification, although not reduced to writing until December 7, 1993. To support these assertions, Appellant has submitted an affidavit of John C. Hart, a member of Appellant's Board of Directors, attesting to the truth of these assertions. Finally, Appellant asserts that the agreements were reached for legitimate business purposes and not to circumvent SBA regulations. According to Appellant, since it had preexisting shareholder agreements with Louisiana and Hughes which rebut the presumption of affiliation in 13 CFR 121.401(e)(3) under the Tri- Fuels case, until these agreements are terminated, neither Louisiana nor Hughes can be considered affiliates of Appellant for purposes of a size determination. Accordingly, Appellant requests that the Regional Office's determination be reversed. 3/ On February 7, 1994, AGEMA Infrared Systems (AGEMA), the protestant who was the original challenger of Appellant's small business size status, filed a timely response to the Petition for Reconsideration. AGEMA argues that Appellant has failed to raise new questions, in accordance with 13 CFR 121.1721(b), that it did not have an opportunity to argue before and that, in consequence, the Petition should be dismissed. Discussion The regulation at 13 CFR 121.1721(b) clearly indicates that the grounds of support for a Petition for Reconsideration must be confined to: ...new questions raised by the decision concerning which petitioner had no previous opportunity to present evidence or argument. The record demonstrates that, although this Office was not informed of an alleged pre-certification oral agreement between Appellant and Louisiana and Hughes, nor was this evidence part of the record below, the Appellant must have had knowledge of the oral agreements and thus had the opportunity to introduce it prior to the close of record had it chosen to do so. Its feeble excuse here that it had no opportunity to present argument when AGEMA raised this issue in its reply, sounds hollow inasmuch as Appellant could have disclosed this evidence in its appeal and at the Regional Office level; moreover, it also had an opportunity to request the Presiding Judge to extend the close of record to file a response to AGEMA's brief, but elected not to do so. Under these circumstances, Appellant cannot now claim to be raising "new questions" on which it had "no previous opportunity to present evidence or argument." Having failed to prevail below, Appellant is merely attempting to augment its evidence and relitigate its appeal. In consequence, Appellant has raised insufficient grounds to support its Petition for Reconsideration, and the petition will be dismissed. Size Appeal of Aumann Inc., No. 3758 (1993). Conclusion The Petition for Reconsideration is DISMISSED. The decision issued on January 4, 1994, is the final decision of the Small Business Administration. __________________________________ Gloria E. Blazsik (Presiding) Administrative Judge ___________________________________ Elwin H. white (Concurring) Administrative Judge ___________________________________ G. Stephen Wright (Concurring) Administrative Judge _______________ 1/ The record clearly shows that, in the absence of affiliation with the two large minority shareholders, Appellant, alone, meets the applicable 500-or-fewer employees size standard. 2/ While the petition is technically late, having been filed (i.e., postmarked) one day after the 20-day period provided in 13 CFR 121.1721(b), for filing a timely Petition for Reconsideration, the Presiding Judge had previously granted Appellant a four-day extension of time to file its petition. See 13 CFR 121.1713(o). 3/ Appellant concedes that this Office had not been advised of the pre-certification agreements reached with Louisiana and Hughes and that the oral agreements were not introduced into the record at the Regional Office or appeal levels. Appellant has no explanation for this omission other than to state that AGEMA Infrared Systems (AGEMA) raised the timing of the shareholders' agreements in its reply filed on December 30, 1993, and that Appellant had no opportunity to present evidence on this point. However, the record closed on December 30, 1993, and Appellant failed to request an extension of time to file a reply to AGEMA's pleading.