The most successful "small business" contractors are not small, according to an analysis of government procurement data by Eagle Eye Publishers.

The top 30 companies receiving contracts designated as "small business" in 2005 include Lockheed Martin, General Dynamics and Northrop Grumman. L-3 Communications Holdings led the list with more than $650 million in contracts recorded as going to small firms.

The list also includes a large number of Alaska Native Corporations and tribally owned businesses that are officially classified as small no matter what their size.

Eagle Eye's ranking is the latest to highlight the inaccuracy of contracting information gathered by the Federal Procurement Data System-Next Generation, the government's official database.

"The bad news is that the continued, frequent appearance of large businesses in the list of small business vendors suggests the small business procurement figure may be too high," Eagle Eye President Paul Murphy wrote in an open letter. "Further in-depth research is required before analysts can state conclusively…why many large firms appear in the list."

He said Eagle Eye uses publicly available FPDS data and adds parent-company names through its own research.

SBA officials have said in the past that the anomalies are the result of large businesses acquiring small ones, businesses outgrowing their size standard during the life of a contract, or data entry errors.

But Lloyd Chapman, president of the American Small Business League, has charged that some large companies are deliberately misrepresenting their eligibility for small business contracts. The League says SBA has refused to provide a list of all companies that received small business contracts; it has offered $10,000 to anyone who will provide the list.

SBA Administrator Steven Preston and Paul Denett, head of OMB's Office of Federal Procurement Policy, said in September that a new rule on contractor reporting and certifying of size status would be issued "soon." (SAA, 10/13) Three years ago SBA proposed requiring annual recertification of small business eligibility, but it has not published a final rule.

SBA reported that small firms received 25.36% of prime contract dollars in 2005. But Democrats on the House Small Business Committee said they documented $12 billion in "small business" contracts that actually went to large companies, reducing the small business market share to 21.57%. (SAA, 8/11)