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by Garry Kranz
Virginia Business
May 2004

Robert Hisel Jr. had to nearly destroy Preferred Systems Solutions Inc. in order to save it — or at least to make the company into what he wanted it to be. In the late 1990s, even though the company was profitable, Hisel sold all of its commercial contracts. He kept the name, though, and turned the firm’s focus away from commercial customers such as America Online and the World Bank IMF and began focusing on the government sector’s information technology needs.

Six years later, there’s no question that the risky move has paid off. PSS is one of the few new firms to successfully tap the lucrative but complex government IT market. The 8(a)-certified firm (a designation for small and minority businesses that participate in a program sponsored by the Small Business Administration). It began growing steadily by late 1999, and lately has started to gain momentum. The company took in more than $13 million in 2003, and was recently recognized by Deloitte & Touche as one of the fastest-growing IT firms in the country.

“It was an expensive proposition and it took a couple of years to get the ball rolling, but the proceeds from the sale allowed us the time we needed to build in the infrastructure and staff the organization with talented, knowledgeable people in this particular space,” says Hisel, the company’s president and CEO.

Hisel expects PSS to fare even better in 2004, projecting that revenues will top $25 million, thanks to several recent Department of Defense and Department of Homeland Security contracts. The company is one of a handful of prime contractors awarded the NAVAIR Multiple Award contract, a five-year engineering and IT services opportunity that boasts a total value of $460 million. It also won a $10 million contract with the Military Traffic Management Command to support its entire network operations center rake. And just this year, it was named prime contractor by the Transportation Security Administration to support all internal databases.

The company, which currently has 185 employees, expects to hire another 100 people in 2004 and plans to pursue the General Services Administration FAST 2 contract, a 7-year, $7 billion government-wide acquisition contract for 8(a) firms, as well as more work in defense and homeland security programs.

Success, Hisel says, results from a passionate focus on protecting the company’s reputation. “We get a lot of our business from repeat customers and word of mouth,” he says, noting that PSS has never lost in a re-compete of its existing contracts.

PSS also thrives, Hisel says, because of a strong relationship with partner firms, such as Accenture, Computer Sciences Corp. and Northrop Grumman. And it’s not just a case of the little firm seeking out the biggest and best partners; the big companies ring up PSS. “These guys are a bunch of go-getters,” says Vince Vlascho, a partner in Accenture’s Federal Government Group. “They work to understand what our needs are and how they can best support us, and they’ve got a unique knack for finding the right folks with the right skill sets in a timely fashion. There’s never a blip with these guys.”

Hisel hopes PSS can leverage this reputation to become a $100 million company within the next four or five years — even while maintaining its emphasis on providing top customer service. Of course, challenges loom on the horizon. PSS will be leaving the 8(a) program in 2006 and thus lose the advantages of that designation in winning contracts. But Hisel isn’t worried. “With our reputation and our relationships with our current customers, we honestly can’t see anything but a major upside to our growth.”

Return to Virginia Business - May 2004