TeraThink's small start leads to big success
Investments in people, infrastructure fuel growth
- By David Hubler
- Jul 28, 2011
Paul Lombardi founded TeraThink Corp. in 2002 as an IT and management consultant services provider to the federal government. But on the advice of a mentor, he waited a few years before jumping into the market.
“It wasn’t until 2006 that I actually took the training wheels off and deciding to go focus on building TeraThink,” said Lombardi, the company’s president and CEO. “Since [then] we’re really been focused on building TeraThink’s capabilities, our resources, our experiences.”
Revenues nudged just past the $1 million mark in 2006, and they haven’t stopped increasing ever since.
In fact, the certified SBA 8(a) small business based in Reston, Va., has seen its revenues jump to $3.53 million in 2007 and to $15.19 million in 2010.
That five-year growth rate of 95.7 percent landed TeraThink at the No. 25 spot on the 2011 Fast 50. The company was ranked No. 43 last year. TeraThink now has between 75 and 80 employees and contract workers, for a prominent place among the 2011 Fast 50.
Lombardi, for one, is not surprised by those numbers because he has consistently pushed company growth, which he cited as one reason why TeraThink has thrived in a nationally weak economy.
From the start, he said, TeraThink invested in company growth, beginning with its purchase of Deltek Costpoint, a high-end software system that provides business project functionality including accounting, project management, Human Resources, time and attendance, payroll, recruiting and business development. It was “the most robust, [Defense Contracting Audit Agency]-compliant financial system out there,” he said. The company also invested early in gaining CMMI Level 2 certification.
“We [also] spend a lot of time, energy, dollars on identifying, recruiting and retaining outstanding performers in the space that we operate in,” he said. “Ultimately what I think that does is translate to high-quality delivery and even further, to making sure our customers are happy.”
As an example of the company’s work, he cited a management consulting contract with an unnamed Defense Department agency for which TeraThink did an analysis of alternatives involving several possible solutions and helped the agency understand the pros, cons, risks and financial effects of each and select the best alternative.
“Ultimately that resulted in millions of dollars in savings for the path that they chose," Lombardi said. "As a result, we continue to support that path that they chose and help them make sure that the way they implement the solution is the most effective and efficient."
Such successes have fostered repeat business for TeraThink.
Growth “is definitely in the program” going forward too, he said. “We budgeted to do around $20 [million in revenue] this year. I think we’ll probably end up around $19 million.”
TeraThink is engaged in a number of indefinite-delivery, indefinite-quantity task orders, including from the Navy’s $5.3 billion Seaport-E and GSA’s STARS, a $15 billion governmentwide acquisition contract for 8(a) companies.
TeraThink is partnering to win business on the IRS’ Total Information Processing Support Services-4, the Homeland Security Department’s Enterprise Acquisition Gateway for Leading Edge Solutions and the National Institutes of Health’s 10-year, $20 billion Chief Information Officer - Solutions and Partners 3.
“It was an investment going after those contract vehicles, but we’re anticipating some high return down the road,” he said.
“We want to focus and strategically target opportunities that can be procured through those vehicles and basically set up a proposal machine that is going to allow us capitalize on some of the task orders that come out there,” he said.
Lombardi is also looking to diversify the company’s offerings to include cybersecurity services. “It’s not our bread and butter, but we do want to consider expanding into that space, and we’re looking for some new opportunities around there,” he said.
And he won’t say no to possible acquisitions down the road.
“Obviously we’re not big enough where we can go out and take on a major acquisition,” he said. “But there may be some strategic opportunities that we would evaluate if it made sense for the company.”
Lombardi said he has “learned a ton” from his father, Paul Lombardi, the former president and CEO of DynCorp from 1997 until its sale to Computer Sciences Corp. in 2003, who now serves on the TeraThink advisory board.
“Something that he’s imparted on me that I really cherish is that reputation is everything,” he said, “and to operate aboveboard with sound business ethics across everything that we do.”