Accounts Receivable - Net

12 Months Ended

Sep. 29, 2019

Accounts Receivable - Net and Revenue Recognition

Net accounts receivable consisted of the following at September 29, 2019 and September 30, 2018:



	September 29, 2019			September 30, 2018
	(in thousands)
Billed	$	522,256		$	464,062
Unbilled	300,035			267,739
Total accounts receivable – gross	822,291			731,801
Allowance for doubtful accounts	(53,571		)	(37,580		)
Total accounts receivable – net	$	768,720		$	694,221

Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at September 29, 2019 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions that may affect a client's ability to pay.

Once contract performance is underway, we may experience changes in conditions, client requirements, specifications, designs, materials and expectations regarding the period of performance. Such changes result in change orders and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without a definitive client agreement. Revenue and any corresponding receivable in these cases are recognized based on the policy described in Note 3, "Revenue Recognition" above.

Total accounts receivable at September 29, 2019 and September 30, 2018 included approximately $15 million and $74 million, respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating earnings when it is probable that the claim will result in a different contract value than the amount previously estimated. In fiscal 2019, we recognized reductions of revenue of $26.7 million and $4.6 million, and related losses in operating income of $28.2 million and $5.7 million in our CIG and RCM segments, respectively, primarily due to the resolution of several claims in fiscal 2019 for amounts lower than we previously expected. In fiscal 2018, we recognized a reduction of revenue of $10.6 million and related losses in operating income of $12.5 million in our CIG segment for a fixed-price construction project that was completed in fiscal 2014 prior to our decision to exit similar activities in the RCM segment.

On our state and local government contracts, billed accounts receivable were $129.3 million and $89.3 million at September 29, 2019 and September 30, 2018, respectively. The total of unbilled receivables and contract assets were $59.6 million and $38.6 million at September 29, 2019 and September 30, 2018, respectively. Other than the state and local governments and U.S. federal government, no single client accounted for more than 10% of our accounts receivable at September 29, 2019 and September 30, 2018.