The Association of Colleges says the Office for Standards in Education needs to think again about the way it inspects further education.
In a submission to the Commons education and skills select committee, it accused Ofsted of failing to recognise the progress of students who do not undertake a full qualification, or fail to complete their course.
The AoC, which represents colleges in England, also complained that a college could be deemed to be inadequate if provision was unsatisfactory in just four out of 14 inspected curriculum areas, even if the rest were excellent.
Judith Norrington, AoC director of curriculum and quality, said: "It is in colleges' interests to offer the best possible service.
"The AoC believes Ofsted needs to look at its own processes to see if they do result in a picture of an institution which that institution recognises."
But the association's position was given short shrift by chief inspector David Bell, who gave evidence to the committee on Wednesday.
He said: "The judgment about colleges being inadequate is a serious one, and it is based on the evidence we have gathered."
David Taylor, Ofsted's director of inspection, said colleges must accept that their role has changed since the days when "putting posteriors on benches was the highest priority".