Revenue

9 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

The Company's revenues from contracts with customers (clients) are derived from offerings that include consulting, analytics, digital solutions, engineering, and cyber services, substantially with the U.S. government and its agencies and, to a lesser extent, subcontractors. The Company also serves foreign governments, as well as domestic and international commercial clients. The Company performs under various types of contracts, which include cost-reimbursable contracts, time-and-materials contracts, and fixed-price contracts.

Contract Estimates

Many of our contracts recognize revenue under a contract cost-based input method and require an Estimate-at-Completion (EAC) process, which management uses to review and monitor the progress towards the completion of our performance obligations. Under this process, management considers various inputs and assumptions related to the EAC, including, but not limited to, progress towards completion, labor costs and productivity, material and subcontractor costs, and identified risks. Estimating the total cost at completion of performance obligations is subjective and requires management to make assumptions about future activity and cost drivers under the contract. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the profitability of the Company’s contracts. Changes in estimates related to contracts accounted for under the EAC process are recognized on a cumulative catch-up basis in the period when such changes are determinable and reasonably estimable. If the estimate of contract profitability indicates an anticipated loss on a contract, the Company recognizes the total loss at the time it is identified. For each of the three and nine months ended December 31, 2019 and 2018, the aggregate impact of adjustments in contract estimates was not material.

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by contract type, customer, as well as whether the Company acts as prime contractor or sub-contractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories.

Revenue by Contract Type:

We generate revenue under the following three basic types of contracts:

• Cost-Reimbursable Contracts: Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fixed fee or award fee.

• Time-and-Materials Contracts: Under contracts in this category, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for billable material costs and billable out-of-pocket expenses inclusive of allocable indirect costs. We assume the financial risk on time-and-materials contracts because our costs of performance may exceed negotiated hourly rates.

• Fixed-Price Contracts: Under a fixed-price contract, we agree to perform the specified work for a predetermined price. To the extent our actual direct and allocated indirect costs decrease or increase from the estimates upon which the price was negotiated, we will generate more or less profit, respectively, or could incur a loss.

The table below presents the total revenue for each type of contract:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2019				2018				2019				2018
Cost-reimbursable	$	1,052,313	57	%	$	901,660	54	%	$	3,104,961	57	%	$	2,612,938	53	%
Time-and-materials	428,081		23	%	376,368		23	%	1,272,281		23	%	1,172,461		24	%
Fixed-price	369,047		20	%	385,084		23	%	1,116,952		20	%	1,138,558		23	%
Total Revenue	$	1,849,441	100	%	$	1,663,112	100	%	$	5,494,194	100	%	$	4,923,957	100	%

Revenue by Customer Type:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2019				2018				2019				2018
U.S. government:
Defense Clients	$	904,389	49	%	$	767,340	46	%	$	2,608,595	48	%	$	2,280,892	46	%
Intelligence Clients	383,422		21	%	378,043		23	%	1,207,709		22	%	1,161,256		24	%
Civil Clients	485,506		26	%	444,661		27	%	1,488,551		27	%	1,297,823		26	%
Total U.S. government	1,773,317		96	%	1,590,044		96	%	5,304,855		97	%	4,739,971		96	%
Global Commercial Clients	76,124		4	%	73,068		4	%	189,339		3	%	183,986		4	%
Total Revenue	$	1,849,441	100	%	$	1,663,112	100	%	$	5,494,194	100	%	$	4,923,957	100	%

Revenue by Whether the Company Acts as a Prime Contractor or a Sub-Contractor:

	Three Months Ended December 31,								Nine Months Ended December 31,
	2019				2018				2019				2018
Prime Contractor	$	1,714,705	93	%	$	1,534,912	92	%	$	5,064,657	92	%	$	4,524,247	92	%
Sub-contractor	134,736		7	%	128,200		8	%	429,537		8	%	399,710		8	%
Total Revenue	$	1,849,441	100	%	$	1,663,112	100	%	$	5,494,194	100	%	$	4,923,957	100	%

Performance Obligations

Remaining performance obligations represent the transaction price of exercised contracts for which work has not yet been performed, irrespective of whether funding has or has not been authorized and appropriated as of the date of exercise. Remaining performance obligations do not include negotiated but unexercised options or the unfunded value of expired contracts.

As of December 31, 2019 and March 31, 2019, the Company had $6.7 billion and $5.8 billion, respectively, of remaining performance obligations and we expect to recognize more than half of the remaining performance obligations as revenue over the next 12 months, and approximately three quarters over the next 24 months. The remainder is expected to be recognized thereafter.

Contract Balances

The Company's performance obligations are typically satisfied over time and revenue is generally recognized using a cost-based input method. Fixed-price contracts are typically billed to the customer using milestone or fixed monthly payments, while cost-reimbursable-plus-fee and time-and-material contracts are typically billed to the customer at periodic intervals (e.g. monthly or weekly) as indicated by the terms of the contract. Disparities between the timing of revenue recognition and customer billings and cash collections results in net contract assets or liabilities being recognized at the end of each reporting period.

Contract assets primarily consist of unbilled receivables typically resulting from revenue recognized exceeding the amount billed to the customer and right to payment is not just subject to the passage of time. Contract liabilities primarily consist of advance payments, billings in excess of costs incurred and deferred revenue. Contract assets and liabilities are reported on a net contract basis at the end of each reporting period. The Company maintains an allowance for doubtful accounts to provide for an estimate of uncollected receivables. Refer to Note 5 for more information on receivables recognized from contracts accounted for under Accounting Standards Codification (ASC) No. 606, Revenue from Contracts with Customers (Topic 606).

The following table summarizes the contract balances recognized on the Company’s condensed consolidated balance sheets:

	Balance Sheet line item	December 31, 2019		March 31, 2019
Contract assets:
Current	Accounts receivable, net of allowance	$	928,056	$	846,372
Long-term	Other long-term assets	61,892		61,391
Total		$	989,948	$	907,763
Contract liabilities:
Advance payments, billings in excess of costs incurred and deferred revenue	Other current liabilities	$	30,585	$	21,316

Changes in contract assets and contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. For the three months ended December 31, 2019 and 2018, we recognized revenue of $36 thousand and $1.9 million, respectively, and for the nine months ended December 31, 2019 and 2018, we recognized revenue of $18.5 million and $23.8 million related to our contract liabilities on April 1, 2019 and 2018, respectively. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances.