When is a small business not so small? When it comes to U.S. Small Business Administration rules and practices that allow Fortune 500 firms to compete for federal contracts as a small business. Such SBA policies run counter to its mission to promote the interests of the small firms that employ half the civilian workforce and produce half of the private-sector's goods and services.

The SBA needs to narrow its definition of ''small business'' and end practices that allow companies to win contracts after they have outgrown the designation. SBA also should eliminate or reduce mistakes and fraud that permit big firms to win federal awards set aside for small businesses.

The stakes are high in Florida, where 90 percent of all firms employ fewer than 20 people. Such firms are critical to our state and national economies. By aiding larger companies, the SBA makes it tougher for the small outfits to compete. It also is misleading for the SBA to count awards to giant firms toward the requirement that 23 percent of federal contracts go to small businesses.

A Miami Herald review of more than 28,000 federal contracting documents for 2004 (Small is big, by business writer Jim Wyss, Dec. 30) uncovered practices that give ample reason for concern. While the SBA was celebrating record-breaking contract awards to small businesses, the study found:

• More than half of Florida's top 20 small-business contractors had more than 500 employees, the SBA's basic definition of a small business. Four of the firms had more than 1,000 employees; three exceeded $1 billion in annual revenue -- although some may have been small firms when they won the contract.
• Millions of contracting dollars may have been credited by mistake to small businesses because of data-entry errors. That includes Florida's top contractor, Point Blank Body Armor in Pompano Beach, a subsidiary of a publicly held firm that had 950 employees at the time and was still winning new small-business contracts.

The SBA's own Inspector General's Office has noted problems. SBA rules allow firms to keep their ''small'' designation for the life of a contract, which can extend for years, even if they are bought by a corporate titan or grow beyond SBA size limits. Without current company-size information, firms can continue to get small-business contracts well beyond the point that they've grown into giants. The SBA doesn't verify the size-information provided by the companies, either.