Tier1 contains Valve's version of the Standard Template Library, known as
CUtl (high-performance game engines rarely use an operating system's own STL implementation). It also provides various other Source-specific features, most notably console commands/variables.
Tier1's source is included in the SDK at
\root\tier1\. It compiles to a static library that is linked by both game DLLs.
See also Tier1.