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Revenue and Contract Balances | 3 Months Ended
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Dec. 29, 2019
Revenue from Contract with Customer [Abstract] |
Revenue and Contract Balances | Revenue and Contract Balances Disaggregation of Revenue We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables provide information about disaggregated revenue:
| Three Months Ended
| December 29, 2019 |  | December 30, 2018
| (in thousands)
Client Sector: |  |  |  |  |
U.S. state and local government | $ | 122,356 |  |  | $ | 123,280 |
U.S. federal government (1) | 245,303 |  |  | 224,757 |
U.S. commercial | 182,971 |  |  | 172,788 |
International (2) | 246,993 |  |  | 196,606 |
Total | $ | 797,623 |  |  | $ | 717,431 |
Contract Type: |  |  |
Fixed-price | $ | 271,055 |  |  | $ | 240,933 |
Time-and-materials | 388,158 |  |  | 336,537 |
Cost-plus | 138,410 |  |  | 139,961 |
Total | $ | 797,623 |  |  | $ | 717,431 |
(1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada, Australia and the United Kingdom, and revenue generated from non-U.S. clients. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three months ended December 29, 2019 and December 30, 2018. Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following:
| Balance at
| December 29, 2019 |  | September 29, 2019
| (in thousands)
Contract assets (1) | $ | 111,115 |  |  | $ | 114,324 |
Contract liabilities | (203,818 | ) |  | (165,611 | )
Net contract liabilities | $ | (92,703 | ) |  | $ | (51,287 | )
(1) Includes $22.8 million and $26.5 million of contract retentions as of December 29, 2019 and September 29, 2019, respectively. Revenue recognized in the first quarter of fiscal 2020 from amounts included in contract liabilities at the beginning of the period was approximately $64 million (approximately $56 million in the first quarter of fiscal 2019.) We recognize revenue primarily using the cost-to-cost measure of progress method, which involves the estimates of progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. For the first quarters of fiscal 2020 and 2019, these adjustments to our operating income were immaterial. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. As of December 29, 2019 and September 29, 2019, our consolidated balance sheets included liabilities for anticipated losses of $13.0 million and $11.5 million, respectively. The estimated cost to complete the related contracts as of December 29, 2019 was approximately $60 million. Accounts Receivable, Net Net accounts receivable consisted of the following:
| Balance at
| December 29, 2019 |  | September 29, 2019
| (in thousands)
Billed | $ | 528,011 |  |  | $ | 522,256 |
Unbilled | 262,771 |  |  | 300,035 |
Total accounts receivable | 790,782 |  |  | 822,291 |
Allowance for doubtful accounts | (55,654 | ) |  | (53,571 | )
Total accounts receivable, net | $ | 735,128 |  |  | $ | 768,720 |
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 December 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. Total accounts receivable at both December 29, 2019 and September 29, 2019 included approximately $14 million and $15 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. We recorded no material gains or losses related to claims in the first quarters of fiscal 2020 and fiscal 2019. On our state and local government contracts, billed accounts receivable were $108.3 million and $129.3 million at December 29, 2019 and September 29, 2019, respectively. The total of unbilled receivables and contract assets were $44.1 million and $59.6 million at December 29, 2019 and September 29, 2019, 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 December 29, 2019 and September 29, 2019. Remaining Unsatisfied Performance Obligations (“RUPOs”) Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $3.1 billion of RUPOs as of December 29, 2019. RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPOs as of December 29, 2019 over the following periods:
| Amount
| (in thousands)
Within 12 months | $ | 1,812,206 |
Beyond | 1,337,324 |
Total | $ | 3,149,530 |
Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days).

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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