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Contract Assets and Liabilities
 12 Months Ended
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]  
Contract Assets and Liabilities Contract Assets and Liabilities
The Company classifies contract assets and liabilities that may be settled beyond one year from the balance sheet date as current, consistent with the length of time of the Company’s project operating cycle.
Contract assets include amounts due under retainage provisions and costs and estimated earnings in excess of billings. The components of the contract asset balances as of the respective dates were as follows:
(in thousands)December 31, 2020December 31, 2019Change
Contract assets
   Costs in excess of billings and estimated earnings$31,894 $44,315 $(12,421)
   Retainage receivable35,204 32,873 2,331 
      Total contract assets$67,098 $77,188 $(10,090)

Retainage receivable represents amounts invoiced to customers where payments have been partially withheld, typically 10%, pending the completion of certain milestones, satisfaction of other contractual conditions or the completion of the project. Retainage agreements vary from project to project and balances could be outstanding for several months or years depending on a number of circumstances such as contract-specific terms, project performance and other variables that may arise as the Company makes progress towards completion.

Contract assets represent the excess of contract costs and profits (or contract revenue) over the amount of contract billings to date and are classified as a current asset. Contract assets result when either: (1) the appropriate contract revenue amount has been recognized over time in accordance with ASC Topic 606, but a portion of the revenue recorded cannot be currently billed due to the billing terms defined in the contract, or (2) costs are incurred related to certain claims and unapproved change orders. Claims occur when there is a dispute regarding both a change in the scope of work and the price associated with that change. Unapproved change orders occur when a change in the scope of work results in additional work being performed before the parties have agreed on the corresponding change in the contract price. The Company routinely estimates recovery related to claims and unapproved change orders as a form of variable consideration at the most likely amount it expects to receive and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Claims and unapproved change orders are billable upon the agreement and resolution between the contractual parties and after the execution of contractual amendments. Increases in claims and unapproved change orders typically result from costs being incurred against existing or new positions; decreases normally result from resolutions and subsequent billings.
The current estimated net realizable value on such items as recorded in contract assets in the consolidated balance sheets was $33.6 million and $38.4 million as of December 31, 2020 and 2019, respectively. The Company anticipates that the majority of such amounts will be approved or executed within one year. The resolution of these claims and unapproved change orders may require litigation or other forms of dispute resolution proceedings. 

Contract liabilities include billings in excess of contract costs and provisions for losses. The components of the contract liability balances as of the respective dates were as follows:
(in thousands)December 31, 2020December 31, 2019Change
Contract liabilities
   Billings in excess of costs and estimated earnings$46,020 $40,662 $5,358 
   Provisions for losses628 1,708 (1,080)
      Total contract liabilities$46,648 $42,370 $4,278 

Billings in excess of costs represent the excess of contract billings to date over the amount of contract costs and profits (or contract revenue) recognized to date. The balance may fluctuate depending on the timing of contract billings and the recognition of contract revenue.

Provisions for losses are recognized in the consolidated statements of operations at the uncompleted performance obligation level for the amount of total estimated losses in the period that evidence indicates that the estimated total cost of a performance obligation exceeds its estimated total revenue. 

The net underbilling (overbilling) position for contracts in process consisted of the following:
(in thousands)December 31, 2020December 31, 2019
Revenue earned on uncompleted contracts$752,564 $726,215 
Less: Billings to date(766,690)(722,562)
   Net underbilling (overbilling)$(14,126)$3,653 
(in thousands)December 31, 2020December 31, 2019
Costs in excess of billings and estimated earnings$31,894 $44,315 
Billings in excess of costs and estimated earnings(46,020)(40,662)
   Net underbilling (overbilling)$(14,126)$3,653 
During the years ended December 31, 2020 and 2019, we recorded revisions in our contract estimates for certain Construction projects. For individual projects with revisions having a material gross profit impact, this resulted in 2020 gross profit write downs totaling $10.4 million on fifteen Construction projects, eight of which were in the Southern California region for a total of $6.9 million, three projects in the Mid-Atlantic region for $1.5 million and two projects in the New England region for $1.1 million, with the remaining $0.9 million comprised of smaller amounts from various other regions. The Company is pursuing recovery remedies for costs incurred due to delays and disruptions, but is not currently in a position to recognize any potential recoveries in its financial statements. We also recorded revisions in 2020 gross profit write ups totaling $1.7 million on three Construction projects, including a gross profit write up of $1.3 million on two Ohio projects and $0.3 million on a single Mid-Atlantic region project. There were no significant gross profit write downs for Service projects during 2020.
During the year ended December 31, 2019, the Company recorded revisions having a material gross profit impact, that resulted in 2019 gross profit write downs totaling $12.4 million on sixteen Construction projects, twelve of which were in the Southern California region for a total of $9.9 million and $1.4 million on a single Western Pennsylvania project. We also recorded an $0.4 million gross profit write down on a single Southern California region Service project. We also recorded revisions in 2019 gross profit write ups totaling $4.7 million on ten Construction projects, including a gross profit write up of $0.4 million on a single Southern California Service project and $0.3 million on a single Mid-Atlantic region Service project.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and exclude unexercised contract options. The Company’s remaining performance obligations includes projects that have a written award, a letter of intent, a notice to proceed or an agreed upon work order to perform work on mutually accepted terms and conditions.

As of December 31, 2020, the aggregate amount of the transaction prices allocated to the remaining performance obligations of the Company's Construction and Service segment contracts were $393.5 million and $35.7 million, respectively. As of December 31, 2019, the aggregate amount of the transaction prices allocated to the remaining performance obligations of the Company's Construction and Service segment contracts were $504.2 million and $41.9 million, respectively.
We estimate that 65% and 95% of our Construction and Service segment remaining performance obligations as of December 31, 2020, respectively, will be recognized as revenue during 2021, with the substantial majority of remaining performance obligations to be recognized within 24 months, although the timing of the Company’s performance is not always under its control.