Revenue Recognition

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

NOTE 7 – 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 markets, 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 entity 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 a commercial company as government revenue when the ultimate client is a government agency or department. 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.

	Three Months Ended June 30,										Six Months Ended June 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Markets:
Energy, environment, infrastructure, and disaster recovery	$	202,723		41	%	$	172,103		41	%	$	389,254		40	%	$	343,025		41	%
Health and social programs		207,224		41	%		159,165		37	%		411,463		42	%		314,964		38	%
Security and other civilian & commercial		90,138		18	%		91,842		22	%		182,650		18	%		178,589		21	%
Total	$	500,085		100	%	$	423,110		100	%	$	983,367		100	%	$	836,578		100	%

	Three Months Ended June 30,										Six Months Ended June 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Type:
U.S. federal government	$	271,817		55	%	$	225,298		53	%	$	539,578		55	%	$	444,341		53	%
U.S. state and local government		81,206		16	%		63,704		15	%		156,236		16	%		129,768		15	%
International government		26,322		5	%		28,616		7	%		46,995		5	%		55,994		7	%
Total Government		379,345		76	%		317,618		75	%		742,809		76	%		630,103		75	%
Commercial		120,740		24	%		105,492		25	%		240,558		24	%		206,475		25	%
Total	$	500,085		100	%	$	423,110		100	%	$	983,367		100	%	$	836,578		100	%

	Three Months Ended June 30,										Six Months Ended June 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Contract Mix:
Time-and-materials	$	208,417		42	%	$	169,923		40	%	$	409,368		42	%	$	334,890		40	%
Fixed-price		225,396		45	%		185,902		44	%		444,383		45	%		369,915		44	%
Cost-based		66,272		13	%		67,285		16	%		129,616		13	%		131,773		16	%
Total	$	500,085		100	%	$	423,110		100	%	$	983,367		100	%	$	836,578		100	%

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 June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Contract assets	$	200,202		$	169,088
Contract liabilities		(19,647	)		(25,773	)
Net contract assets (liabilities)	$	180,555		$	143,315

The net contract assets (liabilities) as of June 30, 2023 increased by $37.2 million as compared to December 31, 2022. The increase in net contract assets (liabilities) is 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 six months ended June 30, 2023 and 2022, the Company recognized $16.2 million and $24.9 million in revenue related to the contract liabilities balance at December 31, 2022 and 2021, respectively.

Performance Obligations:

The Company had $1.3 billion in unfulfilled performance obligations as of June 30, 2023 which primarily reflects the future delivery of services for which revenue will be recognized over time. The obligations relate to continued or additional services required on contracts, including those that are either non-cancellable or 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.