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Revenue and Contract Balances | 9 Months Ended
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Jun. 28, 2020
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 |  |  |  | Nine Months Ended |  |
| June 28, 2020 |  | June 30, 2019 |  | June 28, 2020 |  | June 30, 2019
| (in thousands) |  |  |  |  |  |
Client Sector: |  |  |  |  |  |  |
U.S. state and local government | $ | 96,669 |  |  | $ | 172,148 |  |  | $ | 321,286 |  |  | $ | 425,296 |
U.S. federal government (1) | 243,414 |  |  | 245,723 |  |  | 731,977 |  |  | 686,979 |
U.S. commercial | 168,985 |  |  | 194,980 |  |  | 514,154 |  |  | 533,738 |
International (2) | 200,703 |  |  | 212,942 |  |  | 674,110 |  |  | 619,833 |
Total | $ | 709,771 |  |  | $ | 825,793 |  |  | $ | 2,241,527 |  |  | $ | 2,265,846 |
Contract Type: |  |  |  |  |  |  |
Fixed-price | $ | 275,810 |  |  | $ | 271,287 |  |  | $ | 802,477 |  |  | $ | 760,051 |
Time-and-materials | 309,123 |  |  | 419,564 |  |  | 1,047,900 |  |  | 1,101,728 |
Cost-plus | 124,838 |  |  | 134,942 |  |  | 391,150 |  |  | 404,067 |
Total | $ | 709,771 |  |  | $ | 825,793 |  |  | $ | 2,241,527 |  |  | $ | 2,265,846 |
(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 and nine months ended June 28, 2020 and June 30, 2019. 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 |  |
| June 28, 2020 |  | September 29, 2019
| (in thousands) |  |
Contract assets (1) | $ | 100,324 |  |  | $ | 114,324 |
Contract liabilities | (182,939) |  |  | (165,611) |
Net contract liabilities | $ | (82,615) |  |  | $ | (51,287) |
(1) Includes $19.9 million and $26.5 million of contract retentions as of June 28, 2020 and September 29, 2019, respectively. In the first nine months of fiscal 2020, we recognized revenue of approximate ly $106 million from amounts included in the contract liability balance at the end of fiscal 2019, compared to approximately $84 million for the co mparative prior-year period. 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. As a result, we recognized immaterial operating income adjustments in the third quarter of fiscal 2020 and net unfavorable operating income adjustments of $2.8 million in the first nine months of fiscal 2020 compared to net favorable operating income adjustments of $8.2 million and $5.0 million for the prior-year periods in the third quarter and first nine months of fiscal 2019, respectively. 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 June 28, 2020 and September 29, 2019, our consolidated balance sheets included liabilities for anticipated losses of $19.5 million and $11.5 million, respectively. The estimated cost to complete the related contracts as of June 28, 2020 was approxima tely $96 million. Accounts Receivable, Net Net accounts receivable consisted of the following:
| Balance at |  |
| June 28, 2020 |  | September 29, 2019
| (in thousands) |  |
Billed | $ | 431,117 |  |  | $ | 522,256 |
Unbilled | 256,404 |  |  | 300,035 |
Total accounts receivable | 687,521 |  |  | 822,291 |
Allowance for doubtful accounts | (55,655) |  |  | (53,571) |
Total accounts receivable, net | $ | 631,866 |  |  | $ | 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 June 28, 2020 are expected to be billed and collecte d 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, including the potential impacts of the coronavirus disease 2019 ("COVID-19") pandemic, that may affect our clients' ability to pay. Total accounts receivable at June 28, 2020 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 redeterminat ion. 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 the first nine months of fiscal 2020, we recorded net losses in operating income related to claims of $4.4 million in our Commercial/ International Services Group ("CIG") segment. I n the first nine months of fiscal 2019, we recognized reductions of revenue of $4.8 million and $4.2 million related to claims and corresponding losses in operating income of $5.9 million and $4.2 million in our Remediation and Construction Management ("RCM") and CIG segments, respectively. No single client accounted for more than 10% of our accounts receivable at June 28, 2020 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 $3.0 billion of RUPOs as of June 28, 2020. 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 June 28, 2020 over the following periods:
| Amount
| (in thousands)
Within 12 months | $ | 1,763,438 |
Beyond | 1,286,495 |
Total | $ | 3,049,933 |
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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045 + Details
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