A growing campaign to uncover abuses of big companies getting billions of dollars in government contracts that should go to small businesses may be coming to a head locally.

The U.S. Small Business Administration has scheduled hearings Tuesday in San Francisco that are expected to highlight many small businesses voicing their concerns over the issue.

"Small businesses are the heart and soul of the U.S. economy and they're not getting their fair cut," said Lloyd Chapman, president and founder of the American Small Business League and a long-time crusader against abuse and fraud in federal contracting.

The Novato resident stresses that Bay Area small businesses alone are losing upwards of $5 billion a year on government contracts given to large businesses passing themselves off as small. He puts annual losses nationwide at $50 billion.

The U.S. government spends more than $300 billion a year on government contracts. Federal law says 23 percent of these contracts should go to small businesses.

The debate goes back more than a half-century to World War II, when small businesses complained that big defense contractors received all the work. In the early 1950s, Congress passed a bill to have a fair cut go to small business.

"(Chapman) has helped raise the level of attention on this," said Gary Jackson, SBA assistant administrator for size standards, who will be at Tuesday's hearings. "But we don't think the problem is as significant as some people are indicating."

But the SBA, which has different definitions of a small business depending on the industry, took 600 names off its database in 2003 that turned out to be large companies.

Some of those listed as small businesses have included Redwood City-based Oracle, AT&T, Nike, Sprint and Time Warner.Jackson countered that part of the problem is small businesses growing to become large, or being acquired by a large company are still being deemed small. That becomes problematic because many of the contracts run for five years or more, Jackson said.

A recent study by the Center for Public Integrity on Pentagon contracts from 1998 to 2003 revealed that $47 billion was diverted from small businesses to large businesses as a result of acquisitions.

Jackson stressed that any bidder can file a protest if he or she thinks a contract winner is not small. In manufacturing, for example, the SBA considers a small business to be 500 employees or less. A general contractor cannot generate more than $28 million a year to be considered small, Jackson said.

"Anything that can bring light to the problem of favoring the big guy over the small guy is very important," said Martyn Hopper, California state director of the National Federation of Independent Business, the largest small-business advocacy organization in the country. "We need to make it an equal playing field."

Hopper said the issue at times gets lost among small business concerns over the high cost of health care, insurance and workers' compensation.