WASHINGTON ? At least $12 billion in contracts the government claimed it gave to small companies last year wound up instead in the coffers of large corporations such as Microsoft and Rolls Royce, greatly inflating the Bush administration?s record of help to small businesses, Democratic congressional investigators say.

When small-business contracts with large companies are excluded, the government missed for a sixth straight year a requirement that 23 percent of its $314 billion in annual contracts go to small businesses, House Democrats conclude in a report to be released today.

There were two basic problems, the investigators said: Federal agencies miscoded thousands of contracts to big companies as small-business awards. And many other companies that started small grew or were purchased by large corporations but continued to get the contracts.

"It?s just unbelievable," said Rep. Nydia Velazquez of New York, the top Democrat on the House Small Business Committee. "We have just got to start holding agencies accountable."

Velazquez is asking the Government Accountability Office and internal watchdogs for the State, Treasury, Defense and Transportation departments to investigate their contracting procedures and see whether criminal activity is involved.

Under federal law, representatives of large companies that falsely claim to be small firms can be punished with 10 years in prison, $500,000 in fines, and a permanent ban from doing government business.

Generally, the government defines a small business as one with fewer than 500 employees, though that limit can vary among industries. In general, retail firms can only have maximum average annual receipts of $6.5 million.

The Small Business Administration last month issued a report saying the government gave 25.4 percent of its contract dollars in 2005 to small firms. SBA said it relied on contracting figures provided by each federal agency. The Democrats? report said the accurate figure was 21.6 percent.

When asked about corporations appearing in the tally, SBA spokesman Raul Cisneros said, "That?s the official information that agencies give us."

The House Democrats? report, however, said the administration?s tally of small business contracts in 2005 included some of the world?s largest companies:

? Microsoft Corp. won eight smallbusiness contracts worth $1.5 million. Five contracts, worth $475,000, came from the Pentagon. The others came from the Drug Enforcement Administration and the Bureau of Prisons.

? Rolls-Royce plc received $2.2 million in 63 contract actions. The bulk came from the Navy, which spent $2 million on 53 Rolls contracts.

? Wal-Mart, whose 1.5 million workers make it the nation?s largest private employer, received three small-business contracts totaling $14,232 from the Department of the Army.

? Exxon Mobil Corp., with $370 billion in annual revenue in 2005, won a $63,855 contract from the Pentagon?s Defense Logistics Agency and a $50,000 award from the Interior Department?s Minerals Management Service.

? Google Inc. won separate contracts from the U.S. Coast Guard ($41,800), the Peace Corps ($15,000) and the Federal Highway Administration ($2,995).

Tom Greer, a spokesman for Lockheed Martin, said it?s a common problem. The aeronautics company has 135,000 employees and reported $37 billion in sales last year. The House panel, however, found that government agencies classified $8 million in Lockheed contracts as small-business awards. Greer said the company has often had to ask federal agencies to correct records showing Lockheed as a small business.