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REVENUE RECOGNITION
 9 Months Ended
Sep. 30, 2022
Revenue from Contract with Customer [Abstract]  
REVENUE RECOGNITION REVENUE RECOGNITION
We recognize revenue in accordance with ASC Topic 606, "Revenue from Contracts with Customers." The unit of account in ASC 606 is a performance obligation, which is a promise in a contract with a customer to transfer a good or service to the customer.
The majority of our revenue is recognized over time, as control is transferred continuously to our customers who receive and consume benefits as we perform, and is classified as services revenue. Revenue transferred to customer over time accounted for 87% and 91% of our revenue for the three and nine months ended September 30, 2022, respectively, and 91% and 92% of our revenue for the three and nine months ended September 30, 2021, respectively. All of our business groups earn services revenue under a variety of contract types, including time and materials, firm-fixed-price, firm-fixed-price level of effort, and cost-plus fixed-fee contract types, which may include variable consideration.
We also recognize revenue at a point in time on certain contracts, when our customer obtains control of the transferred product, generally upon delivery, and the revenue is classified as product revenue. Revenue transferred to customers at a point in time accounted for 13% and 9% of our revenue for the three and nine months ended September 30, 2022, respectively, and 9% and 8% of our revenue for the three and nine months ended September 30, 2021, respectively.
For certain performance obligations where we are not primarily responsible for fulfilling the promise to provide the goods or services to the customer, do not have inventory risk, and have limited discretion in establishing the price for the goods or services, we recognize revenue on a net basis.
We provide for anticipated losses on contracts during the period when the loss is determined by recording an expense for the total expected costs that exceed the total estimated revenue for a performance obligation. No contract losses were recorded during the three and nine months ended September 30, 2022, and 2021.
Disaggregated Revenues
In addition to our segment reporting, as further discussed in Note 17 – Segment Information, we disaggregate our revenue by customer and contract types. We treat sales to U.S. customers as sales within the United States, regardless of where the services are performed. Substantially all of our revenues are generated from U.S. customers.
Table 3.1: Revenue by Customer Type
For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Amount%Amount%Amount%Amount%
(in thousands)
Federal$60,294 95 %$66,612 97 %$160,351 95 %$171,091 96 %
State & local, and commercial3,299 5 %2,369 3 %9,193 5 %7,292 4 %
Total revenue$63,593 $68,981 $169,544 $178,383 
Table 3.2: Revenue by Contract Type
For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Amount%Amount%Amount%Amount%
(in thousands)
Firm fixed-price$54,055 85 %$60,349 87 %$140,636 83 %$155,832 87 %
Time-and-materials3,457 5 %3,154 5 %9,104 5 %9,243 5 %
Cost plus fixed fee6,081 10 %5,478 8 %19,804 12 %13,308 8 %
Total revenue$63,593 $68,981 $169,544 $178,383 
As our primary customer base includes agencies of the U.S. government, we have a concentration of credit risk associated with our accounts receivable, as 95% of our billed accounts receivable, as of September 30, 2022, were directly with U.S. government customers. We perform ongoing credit evaluations of all our customers and generally do not require collateral or other guarantees from our customers. We maintain allowances for potential losses.
Table 3.3: Revenue Concentrations Greater than 10% of Total Revenue
For the Three Months EndedFor the Nine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
U.S. Department of Defense ("DoD")77%74%74%75%
Civilian federal agencies18%23%21%21%
Contract Balances
Table 3.4: Contract Balances
September 30, 2022December 31, 2021
(in thousands)
Contract assets (unbilled receivables)$28,290 $41,374 
Contract liabilities6,952 6,381 
The change in the Company's contract assets and contract liabilities during the period was primarily the result of the timing differences between the Company's performance, invoicing and customer payments. Revenue recognized for the three and nine months ended September 30, 2022, that was included in the contract liabilities balance at the beginning of each reporting period, was $0.9 million and $5.0 million, respectively. Revenue recognized for the three and nine months ended September 30, 2021, that was included in the contract liabilities balance at the beginning of each reporting period, was $0.8 million and $4.1 million, respectively.
As of September 30, 2022, we had $111.4 million of remaining performance obligations, which we also refer to as funded backlog. We expect to recognize approximately 85% of our remaining performance obligations over the next 12 months and the balance thereafter.