What do Dell Computer, General Electric and Boeing have in common? These massive corporations were all counted as ``small businesses'' doing work in Florida last year.

The three firms -- along with a dozen other billion-dollar companies -- soaked up at least $76 million in federal contracts that were recorded as going to small businesses during fiscal year 2008, according to government data.

The issue of how federal dollars are spent is critical in Florida, where 90 percent of all businesses have fewer than 20 employees and government contracts represent a valuable lifeline amid a tanking economy.

While the federal government is obliged to put 23 percent of all direct, or prime, contracts in the hands of small firms, it has missed that mark for the past three years.

``Call me crazy, but I just don't think Fortune 500 companies should be counted as small-business contracts,'' said Lloyd Chapman, president of the American Small Business League. ``I just can't believe this is still going on.''

The Small Business Administration recently reported that, nationwide, small firms received a record $93.2 billion in prime contracts in 2008. While that was $10 billion more than the previous year, it only represented 21.5 percent of all deals.

In Florida, more than 12,000 companies won small-business contracts worth $4.8 billion, according to the FPDS-NG, the government's procurement database.

But a Miami Herald analysis of more than 88,400 contracts performed in the state suggests that the numbers are bloated by companies that either don't belong on the list or defy all reasonable definitions of what makes a small firm.

Among the top 20 small business contractors in Florida, seven had revenue of $100 million or more, and one boasts annual revenue of $1 billion. In addition, nine of the top 20 firms have more than 100 workers and three have more than 1,000 employees.

Deeper in the data, massive public companies such as Northrop Grumman, Honeywell and Raytheon were all counted as small firms doing business in the state.

Some of those corporations are in the database under rules that grandfather them in, said Joe Jordan, the SBA's associate administrator for government contracting and business development.

Others are there by mistake.

As dozens of agencies input more than eight million contracts into the government database every year, errors are made, Jordan said. While the SBA tries to weed out mistakes, it simply does not have the manpower to catch them all. ``I can tell you this data is as clean as it has ever been,'' he said. ``But it's not 100 percent free of errors.''

It's not that large companies are stealing contracts from mom-and-pop shops, Jordan said, but that some U.S. government agencies are overstating their commitment to small business.

Chapman disagrees. Recording corporate goliaths as small firms means fewer contracts are going to the genuinely small businesses that need them, he said.

Data-entry errors are only part of the problem. Complex government rules also skew the figures.

Under federal guidelines, companies that start small and grow large -- as well as small companies that are acquired by larger firms -- can maintain the small-business status of their long-term contracts for up to five years.

For example, one of Florida's top 20 small-business contractors is engineering company Morgan Research Corp., of Huntsville, Ala. The firm was bought in 2006 by Virginia-based consulting firm Stanley. With 3,600 employees and annual revenue of $604 million, Stanley is large.

Join the discussion

The Miami Herald is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. In order to post comments, you must be a registered user of MiamiHerald.com. Your username will show along with the comments you post. Thank you for taking the time to offer your thoughts.

     Showing: Oldest first Newest first Most-recommended first Least-recommended first

@Nyx.AuthorDisplayName@ wrote on @Nyx.PostedAtTime@:

@Nyx.repliedToText@

@Nyx.replyAnswerText@

Reply to this Comment @Nyx.Recommender@ @Nyx.AbuseReporter@