Revenue Recognition

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

NOTE 11 – REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from clients, most of which is earned over time, into categories that depict how the nature, amount and uncertainty of revenue and cash flows are affected by economic and business factors. Those categories are client market, client type, and contract mix. Client markets provide insight into the breadth of the Company’s expertise. In classifying revenue by client market, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market. The Company also classifies revenue by the type of client for which it does business, which is an indicator of the diversity of its client base. The Company attributes revenue generated as a subcontractor to the market or type of the ultimate client. Disaggregation by contract mix provides insight in terms of the degree of performance risk that the Company has assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as the Company is required to deliver a scope of work or level of effort for a negotiated fixed price. Time-and-materials contracts require the Company to provide skilled employees on contracts for negotiated fixed hourly rates. Since the Company is not required to deliver a scope of work, but merely skilled employees, it considers these contracts to be less risky than a fixed-price agreement. Cost-based contracts are considered to provide the lowest amount of performance risk since the Company is generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements.

	Year ended December 31,
	2022		2021		2020
Client Markets:
Energy, environment, and infrastructure	$	664,996	$	653,080	$	609,358
Health, education, and social programs		906,081		677,736		677,454
Safety and security		129,357		115,659		120,599
Consumer and financial		79,530		106,573		99,464
Total	$	1,779,964	$	1,553,048	$	1,506,875

	Year ended December 31,
	2022		2021		2020
Client Type:
U.S. federal government	$	980,406	$	735,104	$	666,968
U.S. state and local government		260,562		235,353		219,507
International government		102,808		139,237		93,581
Government		1,343,776		1,109,694		980,056
Commercial		436,188		443,354		526,819
Total	$	1,779,964	$	1,553,048	$	1,506,875

	Year ended December 31,
	2022		2021		2020
Contract Mix:
Time-and-materials	$	713,581	$	633,152	$	732,365
Fixed-price		802,804		645,761		536,903
Cost-based		263,579		274,135		237,607
Total	$	1,779,964	$	1,553,048	$	1,506,875

Contract Balances:

Contract assets consist primarily of unbilled amounts resulting from long-term contracts when revenue recognized exceeds the amount billed often due to billing schedule timing. Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on long-term contracts due to billing schedule timing.

The following table summarizes the contract balances as of December 31, 2022 and December 31, 2021:

	December 31, 2022			December 31, 2021			Change
Contract assets	$	169,088		$	137,867		$	31,221
Contract liabilities		(25,773	)		(39,665	)		13,892
Net contract assets (liabilities)	$	143,315		$	98,202		$	45,113

The net contract assets (liabilities) as of December 31, 2022 increased by $45.1 million as compared to December 31, 2021, primarily due to the timing difference between the performance of services and billings to and payments from customers. There were no material changes to contract balances due to impairments or credit losses during the period. During the years ended December 31, 2022 and 2021, the Company recognized $27.4 million and $22.7 million in revenue related to the contract liabilities balance at December 31, 2021 and 2020, respectively.

Performance Obligations:

The Company had $1.5 billion in unfulfilled performance obligations as of December 31, 2022, which primarily reflects the future delivery of services for which revenue will be recognized over time. The unperformed obligations relate to continued or additional services required on contracts, including those that are either non-cancellable or those that are cancellable but the Company has determined to have substantive termination penalties, and were generally valued using an estimated cost-plus margin approach, with variable consideration being estimated at the most likely amount. The amounts exclude marketing offers, which are negotiated but unexercised contract options and indefinite delivery/indefinite quantity (IDIQ) and similar arrangements that provided a framework for customers to issue specific tasks, delivery, or purchase orders in the future. The Company expects to satisfy these performance obligations in approximately two years.