Revenue Recognition

9 Months Ended

Sep. 30, 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.  

Changes in the three and nine months ended September 30, 2020 compared to the prior year period were primarily from the increase of revenue in the health, education, and social programs client market as a result of additional work performed for U.S. government clients, including the ITG acquisition, offset by decreases in revenue from the commercial clients primarily in the consumer and financial services, and decreases in the U.S. state and local clients in the energy, environment, and infrastructure client markets. Similarly, for the three and nine months ended September 30, 2020 revenue from time-and-materials and fixed price contracts decreased while revenue from cost-based contracts increased compared to the prior year period.

	Three Months Ended September 30,										Nine Months Ended September 30,
	2020					2019					2020					2019
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Markets:
Energy, environment, and infrastructure	$	148,286		41	%	$	170,640		46	%	$	451,404		42	%	$	485,925		45	%
Health, education, and social programs		159,508		44	%		143,433		38	%		457,553		43	%		408,712		38	%
Safety and security		29,281		8	%		29,416		8	%		89,978		8	%		88,249		8	%
Consumer and financial services		23,240		7	%		30,429		8	%		73,605		7	%		99,003		9	%
Total	$	360,315		100	%	$	373,918		100	%	$	1,072,540		100	%	$	1,081,889		100	%

	Three Months Ended September 30,										Nine Months Ended September 30,
	2020					2019					2020					2019
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Type:
U.S. federal government	$	175,093		49	%	$	148,339		40	%	$	501,496		47	%	$	421,696		39	%
U.S. state and local government		51,589		14	%		71,505		19	%		170,617		16	%		209,993		19	%
International government		20,299		6	%		28,003		7	%		61,421		6	%		86,839		8	%
Total Government		246,981		69	%		247,847		66	%		733,534		69	%		718,528		66	%
Commercial		113,334		31	%		126,071		34	%		339,006		31	%		363,361		34	%
Total	$	360,315		100	%	$	373,918		100	%	$	1,072,540		100	%	$	1,081,889		100	%

	Three Months Ended September 30,										Nine Months Ended September 30,
	2020					2019					2020					2019
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Contract Mix:
Time-and-materials	$	168,458		47	%	$	183,872		49	%	$	505,185		47	%	$	506,183		47	%
Fixed price		134,980		37	%		135,720		36	%		391,888		37	%		417,016		38	%
Cost-based		56,877		16	%		54,326		15	%		175,467		16	%		158,690		15	%
Total	$	360,315		100	%	$	373,918		100	%	$	1,072,540		100	%	$	1,081,889		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 September 30, 2020 decreased by $1.5 million as compared to December 31, 2019. The decrease in net contract assets (liabilities) is primarily due to a decline in work in the consumer and financial services and energy, environmental, and infrastructure client markets offset by increased work in the health, education, and social programs client market. There were no material changes to contract balances due to impairments during the period. As of September 30, 2020, the Company recognized $24.3 million in revenue related to the contract liabilities balance at December 31, 2019.

	September 30, 2020			December 31, 2019			$ Change			% Change
Contract assets	$	139,860		$	142,337		$	(2,477	)		-1.7	%
Contract liabilities		(36,473	)		(37,413	)		940			(2.5	%)
Net contract assets (liabilities)	$	103,387		$	104,924		$	(1,537	)		-1.5	%

Performance Obligations:

The Company had $1.7 billion in unfulfilled performance obligations as of September 30, 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.