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Revenue Recognition
3 Months Ended
Mar. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

NOTE 9 – 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 from being 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.  

Increases in revenue in the three months ended March 31, 2020 compared to the prior year period were primarily from the health, education, and social programs client market as a result of additional work performed for government clients. Revenue from time-and-materials contracts for the three months ended March 31, 2020 increased as compared to the three months ended March 31, 2019.

 

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Client Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy, environment, and infrastructure

 

$

151,362

 

 

 

42

%

 

$

153,403

 

 

 

45

%

Health, education, and social programs

 

 

143,423

 

 

 

40

%

 

 

121,423

 

 

 

35

%

Safety and security

 

 

31,585

 

 

 

9

%

 

 

29,551

 

 

 

9

%

Consumer and financial services

 

 

31,868

 

 

 

9

%

 

 

36,877

 

 

 

11

%

Total

 

$

358,238

 

 

 

100

%

 

$

341,254

 

 

 

100

%

 

 

 

Three Months Ended

 

 

 

March 31, 2020

 

 

March 31, 2019

 

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Client Type:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. federal government

 

$

155,375

 

 

 

44

%

 

$

132,092

 

 

 

39

%

U.S. state and local government

 

 

61,330

 

 

 

17

%

 

 

65,950

 

 

 

19

%

International government

 

 

23,092

 

 

 

6

%

 

 

27,135

 

 

 

8

%

Total Government

 

 

239,797

 

 

 

67

%

 

 

225,177

 

 

 

66

%

Commercial

 

 

118,441

 

 

 

33

%

 

 

116,077

 

 

 

34

%

Total

 

$

358,238

 

 

 

100

%

 

$

341,254

 

 

 

100

%

 

 

 

Three Months Ended

 

 

 

March 31, 2020

 

 

March 31, 2019

 

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Contract Mix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time-and-materials

 

$

168,213

 

 

 

47

%

 

$

155,182

 

 

 

45

%

Fixed price

 

 

133,128

 

 

 

37

%

 

 

134,448

 

 

 

40

%

Cost-based

 

 

56,896

 

 

 

16

%

 

 

51,624

 

 

 

15

%

Total

 

$

358,238

 

 

 

100

%

 

$

341,254

 

 

 

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 net contract assets (liabilities) as of March 31, 2020 increased by $17.3 million as compared to December 31, 2019. The increase in contract assets is primarily due to work in the health, education and social programs and energy, environmental, and infrastructure client markets for the U.S. federal government, most of which has been performed on time-and-materials contracts. There were no material changes to contract balances due to impairments or business combinations during the period.

 

 

 

March 31, 2020

 

 

December 31, 2019

 

 

$ Change

 

 

% Change

 

Contract assets

 

$

151,558

 

 

$

142,337

 

 

$

9,221

 

 

 

6.5

%

Contract liabilities

 

 

(29,318

)

 

 

(37,413

)

 

 

8,095

 

 

 

(21.6

%)

Net contract assets (liabilities)

 

$

122,240

 

 

$

104,924

 

 

$

17,316

 

 

 

16.5

%

Performance Obligations:

The Company had $1.5 billion in unfulfilled performance obligations as of March 31, 2020, 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.