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Revenue Recognition
12 Months Ended
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

NOTE 10 – 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 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 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.  

 

 

Year ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

Client Markets:

 

 

 

 

 

 

 

 

 

 

 

Energy, environment, and infrastructure

$

665,185

 

 

$

564,736

 

 

$

487,001

 

Health, education, and social programs

 

552,600

 

 

 

535,578

 

 

 

518,675

 

Safety and security

 

120,078

 

 

 

111,660

 

 

 

102,645

 

Consumer and financial

 

140,662

 

 

 

125,999

 

 

 

120,841

 

Total

$

1,478,525

 

 

$

1,337,973

 

 

$

1,229,162

 

 

 

Year ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

Client Type:

 

 

 

 

 

 

 

 

 

 

 

U.S. federal government

$

561,022

 

 

$

546,050

 

 

$

550,794

 

U.S. state and local government

 

280,357

 

 

 

183,900

 

 

 

127,797

 

International government

 

122,307

 

 

 

122,186

 

 

 

91,318

 

Total Government

 

963,686

 

 

 

852,136

 

 

 

769,909

 

Commercial

 

514,839

 

 

 

485,837

 

 

 

459,253

 

Total

$

1,478,525

 

 

$

1,337,973

 

 

$

1,229,162

 

 

 

Year ended December 31,

 

 

2019

 

 

2018

 

 

2017

 

Contract Mix:

 

 

 

 

 

 

 

 

 

 

 

Time-and-materials

$

703,467

 

 

$

581,446

 

 

$

529,606

 

Fixed-price

 

562,985

 

 

 

526,751

 

 

 

480,584

 

Cost-based

 

212,073

 

 

 

229,776

 

 

 

218,972

 

Total

$

1,478,525

 

 

$

1,337,973

 

 

$

1,229,162

 

 

Contract Balances:

Contract assets consist primarily of unbilled amounts resulting from long-term contracts when revenue recognized exceeds the amount billed 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 $11.7 million increase in the Company’s net contract assets (liabilities) is due to the timing of work performed in relation to billing schedule timing for fixed price programs which resulted in the change in contract liabilities, particularly in our international operations. The increase in contract assets is primarily due to hurricane relief and rebuild work for U.S. state and local governments which is considered part of the energy, environment and infrastructure client market, and most of which has been performed on time-and-materials agreements. The increase in contract liabilities is primarily due to advanced billing for costs in 2019. There were no material changes to contract balances due to impairments or business combinations during the period.

 

 

December 31, 2019

 

 

December 31, 2018

 

 

Change

 

Contract assets

$

142,337

 

 

$

126,688

 

 

$

15,649

 

Contract liabilities

 

(37,413

)

 

 

(33,494

)

 

 

(3,919

)

Net contract assets (liabilities)

$

104,924

 

 

$

93,194

 

 

$

11,730

 

Performance Obligations:

The Company had $1.5 billion in unfulfilled performance obligations as of December 31, 2019, which primarily entail the future delivery of services for which revenue will be recognized over time. The obligations relate to continued or additional services required on contracts and were generally valued using an estimated cost-plus margin approach, with variable consideration being estimated at the most likely amount.  The Company expects to satisfy these performance obligations, on average, in one to two years.