Times are good for small business contractors.

• Position: From the National Defence Blog

* Less than two years ago, the Pentagon warned in a report to Congress that "continued uncertainty will hit smaller, innovative, and niche product companies particularly hard due to a lack of capital resources."

But Pentagon officials offered a much cheerier outlook last week as they unveiled the results of the fiscal year 2014 small business federal scorecard.

The federal government overall awarded 24.9 percent of all prime contracts to small businesses in 2014, or about $91.7 billion. And defense contracts accounted for more than half, at $54.3 billion, a figure that earned the Pentagon high praise from the Obama administration.

"This is the highest percentage of contracting dollars ever awarded to small businesses since the 23 percent goal was established in 1997," said Small Business Administrator Maria Contreras-Sweet, who appeared at a Pentagon news conference with Undersecretary of Defense Frank Kendall.

"Small businesses now are filing more patents than ever," she said. "So they're also driving innovation."

The Pentagon has made a deliberate effort over the past five years to boost small business contracting, said Kendall. The Defense Department's "better buying power" procurement guidelines specifically promote the use of small businesses, "both for innovation and for efficiency and to control costs," he said. "Small businesses, particularly in the services industry, tend to be leaner and more anxious to get work, and thus tend to be more economic in many cases for the department."

Defense officials' upbeat talk about small business contracting is a far cry from pessimistic forecasts that followed the military spending downturn between 2009 and 2013. CEOs of large prime contractors repeatedly warned that they feared losing small business suppliers, especially those that make specialized defense-unique products.

Under Kendall, the Pentagon's industrial policy office launched a sweeping "tier by tier" study of the defense supply chain out of...