How I Did It: William Teel, CEO, 1 Source Consulting
As told to Bobbie Gossage
Industry: IT Services
2006 Inc. 500 Ranking: 171
Three-Year Growth: 660%
William Teel's first job out of college was writing software at the Department of Energy. Sixteen years later, the 41-year-old founder of 1 Source Consulting is preparing to take over the department's entire IT infrastructure. The seven-year project, which is worth more than $1 billion and is one of the largest government contracts ever awarded to a small company, promises to transform 1 Source, whose revenue was $9.4 million in 2005. Securing the deal took more than a little ingenuity and luck. In fact, Teel had to risk everything he owned.
In 2003, the Department of Energy requested proposals to take over its entire IT infrastructure. The contract was open to any company out there. It was open to the Lockheed Martins, the Boeings. They interviewed around 100 companies.
After talking with people at the DOE, we knew that the government wanted to come up with an approach that would highlight its utilization of small business. It also wanted to team with companies that were already working inside the DOE and had a high performance rating.
I had the right background. After college, I worked for the Department of Energy for six years. When I started my own company, the DOE gave me my first contract for $10,000 and I kept getting more business from the agency, including our first big contract, for $3 million.
If we were going to have a shot at this new proposal, we had to get creative. Our strategy was to form a joint venture, Energy Enterprise Solutions, by partnering with RS Information Systems, another company already working inside the DOE. We also proposed that we use DOE employees for the work. That gave us a competitive advantage. The department liked that its employees would get to keep their jobs.
We were notified that we had won in the last week of November 2005. It was a surreal moment. This is the largest contract the department has ever awarded to a minority-owned business. It's worth somewhere between $1.2 billion and $1.4 billion. I immediately told my other three shareholders; we went out for dinner and opened a couple of bottles of champagne. I remember waking up with a headache the next morning.
The days before the contract was officially awarded were a blur. To get the contract, we had to show that we had a $25 million line of credit. We'd been working on it for months, but on December 3, I found out that RSIS wasn't able to secure its share. I had one day to come up with the full $25 million. I had to put up everything I owned--my house, my car--as collateral. But that still didn't add up to 49 percent of $25 million. Wachovia allowed me to use some of the anticipated equity from the contract to secure the rest. That really saved the day.
RSIS and 1 Source had to build a whole new company from scratch over the Christmas holiday. We had to track down a building, put in a network, get phones, buy computers, hire a management staff. We had to show the government that we were ready and operational before they would allow work to start coming over. We worked around the clock.
We're taking over all of the DOE's IT infrastructure. Cyber security, application development, telecommunications, network services, help-desk support--you name it, we're doing it. Before the end of this year, the joint venture will have about $110 million in annual revenue.
I feel a certain amount of excitement and nervousness, but also an overwhelming determination. I want to do everything possible to validate the faith the government has placed in my company.