Revenue Recognition

9 Months Ended

Sep. 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 September 30,										Nine Months Ended September 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Markets:
Energy, environment, infrastructure, and disaster recovery	$	204,802		41	%	$	179,002		38	%	$	596,089		40	%	$	522,698		40	%
Health and social programs		210,501		42	%		197,225		42	%		620,198		42	%		511,312		39	%
Security and other civilian & commercial		86,216		17	%		91,550		20	%		268,599		18	%		270,345		21	%
Total	$	501,519		100	%	$	467,777		100	%	$	1,484,886		100	%	$	1,304,355		100	%

	Three Months Ended September 30,										Nine Months Ended September 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Type:
U.S. federal government	$	279,314		56	%	$	271,609		58	%	$	820,116		55	%	$	715,986		55	%
U.S. state and local government		76,393		15	%		64,910		14	%		232,274		16	%		194,778		15	%
International government		27,623		5	%		23,046		5	%		74,598		5	%		79,060		6	%
Total Government		383,330		76	%		359,565		77	%		1,126,988		76	%		989,824		76	%
Commercial		118,189		24	%		108,212		23	%		357,898		24	%		314,531		24	%
Total	$	501,519		100	%	$	467,777		100	%	$	1,484,886		100	%	$	1,304,355		100	%

	Three Months Ended September 30,										Nine Months Ended September 30,
	2023					2022					2023					2022
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Contract Mix:
Time-and-materials	$	206,646		41	%	$	188,772		40	%	$	615,859		41	%	$	523,661		40	%
Fixed-price		223,173		45	%		210,919		45	%		667,711		45	%		580,836		45	%
Cost-based		71,700		14	%		68,086		15	%		201,316		14	%		199,858		15	%
Total	$	501,519		100	%	$	467,777		100	%	$	1,484,886		100	%	$	1,304,355		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 September 30, 2023 and December 31, 2022:

	September 30, 2023			December 31, 2022
Contract assets	$	209,267		$	169,088
Contract liabilities		(16,989	)		(25,773	)
Net contract assets (liabilities)	$	192,278		$	143,315

The net contract assets (liabilities) as of September 30, 2023 increased by $49.0 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 nine months ended September 30, 2023 and 2022, the Company recognized $17.3 million and $27.1 million in revenue related to the contract liabilities balance at December 31, 2022 and 2021, respectively.

Performance Obligations

The Company had $1.5 billion in unfulfilled performance obligations as of September 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.