Construction Contracts

12 Months Ended

Dec. 31, 2021

Contractors [Abstract]

Construction Contracts

Construction Contracts

Construction contract costs and estimated earnings in excess of billings represent reimbursable costs and amounts earned under contracts in progress as of the balance sheet date. Such amounts become billable according to contract terms, which usually consider the passage of time, achievement of certain milestones, or completion of the project. The Company expects to bill and collect substantially all construction contract costs and estimated earnings in excess of billings as of December 31, 2021 during the year ending December 31, 2022.  

Billings in excess of construction contract costs and estimated earnings represent billings or collections on contracts made in advance of revenue recognized.

The following table summarizes the changes to the balances in the Company’s construction contract costs and estimated earnings in excess of billings account and the billings in excess of construction contract costs and estimated earnings account for the year ended December 31, 2021 and 2020 (in thousands):

	Year ended December 31, 2021				Year ended December 31, 2020
	Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings		Construction contract costs and estimated earnings in excess of billings		Billings in excess of construction contract costs and estimated earnings
Beginning balance	$	138	$	6,088	$	249	$	5,306
Revenue recognized that was included in the balance at the beginning of the period	—		(6,088)		—		(5,306)
Increases due to new billings, excluding amounts recognized as revenue during the period	—		6,237		—		6,244
Transferred to receivables	(714)		—		(545)		—
Construction contract costs and estimated earnings not billed during the period	243		—		138		—
Changes due to cumulative catch-up adjustment arising from changes in the estimate of the stage of completion	576		(1,356)		296		(156)
Ending balance	$	243	$	4,881	$	138	$	6,088

The Company defers pre-contract costs when such costs are directly associated with specific anticipated contracts and their recovery is probable. Pre-contract costs of $2.2 million and $1.7 million were deferred as of December 31, 2021 and 2020, respectively. Amortization of pre-contract costs for the years ended December 31, 2021 and 2020 was $0.3 million and $0.8 million, respectively.

Construction receivables and payables include retentions, which are amounts that are generally withheld until the completion of the contract or the satisfaction of certain restrictive conditions such as fulfillment guarantees. As of December 31, 2021 and 2020, construction receivables included retentions of $3.1 million and $17.1 million, respectively. The Company expects to collect substantially all construction receivables as of December 31, 2021 during the year ending December 31, 2022. As of December 31, 2021 and 2020, construction payables included retentions of $4.2 million and $17.7 million, respectively. The Company expects to pay substantially all construction payables as of December 31, 2021 during the year ending December 31, 2022.

The Company’s net position on uncompleted construction contracts comprised the following as of December 31, 2021 and 2020 (in thousands):

	December 31,
	2021		2020
Costs incurred on uncompleted construction contracts	$	379,993	$	461,725
Estimated earnings	15,115		13,205
Billings	(399,746)		(480,880)
Net position	$	(4,638)	$	(5,950)
Construction contract costs and estimated earnings in excess of billings	$	243	$	138
Billings in excess of construction contract costs and estimated earnings	(4,881)		(6,088)
Net position	$	(4,638)	$	(5,950)

The Company's balances and changes in construction contract price allocated to unsatisfied performance obligations (backlog) for each of the three years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):

	Years Ended December 31,
	2021		2020		2019
Beginning backlog	$	71,258	$	242,622	$	165,863
New contracts/change orders	236,077		45,882		182,495
Work performed	(91,816)		(217,246)		(105,736)
Ending backlog	$	215,519	$	71,258	$	242,622

The Company expects to complete a majority of the uncompleted contracts as of December 31, 2021 during the next 12 to 18 months.