Small Firms' Market Share Shrank in 2004 Small businesses’ share of the federal market fell to 20% in fiscal 2004, down from 23.6% the year before, according to Eagle Eye Publishers. Eagle Eye President Paul Murphy said one likely reason is increased spending on the war in Iraq; most of that money goes to large contractors.. Murphy compiled the figures from the government’s contracting database, the Federal Procurement Data System. FPDS has not yet posted official figures for 2004. Two other factors may contribute to the decrease: bundled contracts and better record-keeping. SBA officials said last year that they were pushing agencies to examine their procurement records more carefully. Several studies have documented widespread examples of large businesses being counted as small ones in official figures, inflating the small-business market share. In addition to data-entry errors, SBA says the miscoding often occurs when a company outgrows its size standard during the life of a contract or is acquired by a larger business. SBA Administrator Hector Barreto has repeatedly said he believes there is little deliberate fraud by large companies posing as small ones. In 2003 federal agencies exceeded the 23% small business goal for the first time.