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.