Revenue Recognition

6 Months Ended

Jun. 30, 2021

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 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 six months ended June 30, 2021 compared to the three and six months ended June 30, 2020 were driven by an increase of revenue in the energy, environment, and infrastructure client market, primarily led by revenue from international government clients, an increase in the health, education, and social programs client market led by revenue from U.S. federal government and international government clients, and an increase in the consumer and financial services client market led by revenue from commercial clients. Revenue from safety and security client market saw a slight decrease in the three months ended June 30, 2021 compared to 2020, mainly from U.S. federal government clients, and a slight increase in the six months ended June 30, 2021 compared to 2020, mainly from international government clients.

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Markets:
Energy, environment, and infrastructure	$	168,230		43	%	$	150,234		42	%	$	332,510		43	%	$	299,050		42	%
Health, education, and social programs		167,319		43	%		152,036		43	%		325,255		42	%		303,388		43	%
Safety and security		29,618		7	%		30,086		9	%		60,816		8	%		60,403		8	%
Consumer and financial services		27,358		7	%		21,631		6	%		52,422		7	%		49,384		7	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		100	%

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Client Type:
U.S. federal government	$	182,188		46	%	$	170,786		48	%	$	358,100		46	%	$	326,389		46	%
U.S. state and local government		58,058		15	%		57,388		16	%		114,961		15	%		118,280		16	%
International government		37,801		10	%		17,858		5	%		74,925		10	%		40,667		6	%
Total Government		278,047		71	%		246,032		69	%		547,986		71	%		485,336		68	%
Commercial		114,478		29	%		107,955		31	%		223,017		29	%		226,889		32	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		100	%

	Three Months Ended June 30,										Six Months Ended June 30,
	2021					2020					2021					2020
	Dollars		Percent			Dollars		Percent			Dollars		Percent			Dollars		Percent
Contract Mix:
Time-and-materials	$	162,368		41	%	$	168,371		48	%	$	322,146		42	%	$	336,521		47	%
Fixed price		160,169		41	%		124,141		35	%		307,696		40	%		257,265		36	%
Cost-based		69,988		18	%		61,475		17	%		141,161		18	%		118,439		17	%
Total	$	392,525		100	%	$	353,987		100	%	$	771,003		100	%	$	712,225		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, 2021 and December 31, 2020:

	June 30, 2021			December 31, 2020			$ Change		% Change
Contract assets	$	150,390		$	143,369		$	7,021		4.9	%
Contract liabilities		(35,700	)		(42,050	)		6,350		(15.1	%)
Net contract assets (liabilities)	$	114,690		$	101,319		$	13,371		13.2	%

The net contract assets (liabilities) as of June 30, 2021 increased by $13.4 million as compared to December 31, 2020. 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 during the period. During the six months ended June 30, 2021 and 2020, the Company recognized $20.1 million and $19.8 million in revenue related to the contract liabilities balance at December 31, 2020 and 2019, respectively.

Performance Obligations:

The Company had $1.6 billion in unfulfilled performance obligations as of June 30, 2021 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.