By Aruna Viswanatha

WASHINGTON (Reuters) - Senator Charles Grassley is raising new questions about a security contract awarded by the Securities and Exchange Commission, as part of his investigation into the agency's watchdog.

In a letter dated September 6, Grassley said he had uncovered evidence that a company the SEC had contracted with to conduct a threat assessment may be improperly using "small business" status to win government contracts.

In a letter to the Small Business Administration, Grassley asked that agency to review whether the company, AT-RISK International, could be considered a small business even though it is part of a larger group called the Sanctuary Alliance Group.

That group has its own chief executive and is marketed as a one-stop-shop for security services, Grassley said.

The company has received a $2 million sub-contract from the Defense Department and "appears to be actively pursuing government contracts" under terms reserved for small businesses, he said.

An AT-RISK representative did not respond to several requests for comment.

Small Business Administration spokeswoman Emily Cain said small businesses are generally considered small if any affiliates also meet the required size standards.

An SEC spokesman declined comment.

Grassley has been investigating complaints about the SEC's inspector general office after the agency put its lead investigator on administrative leave in May.

The investigator, David Weber, was placed on leave after he talked openly about wanting to carry a concealed firearm at work and some employees complained he was a physical threat, Reuters reported in May.

Grassley said when opening his investigation he had received allegations the SEC had hired AT-RISK to investigate the complaints about Weber while the company was also being investigated by the inspector general's office over contracting concerns.

(Reporting By Aruna Viswanatha; Additional reporting by Emily Stephenson; Editing by Tim Dobbyn)