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Revenue and Contract Balances | 12 Months Ended
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Oct. 01, 2023
Revenue from Contract with Customer [Abstract] |
Revenue and Contract Balances | Revenue and Contract Balances We recognize revenue over time as the related performance obligation is satisfied by transferring control of a promised good or service to our customers. Progress toward complete satisfaction of the performance obligation is primarily measured using a cost-to-cost measure of progress method. The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost. This measure includes forecasts based on the best information available and reflects our judgement to faithfully depict the value of the services transferred to the customer. For certain on-call engineering or consulting and similar contracts, we recognize revenue in the amount which we have the right to invoice the customer if that amount corresponds directly with the value of our performance completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near term. For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made. When the current estimate of total costs indicates a loss, a provision for the entire estimated loss on the contract is made in the period in which the loss becomes evident. 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 present revenue disaggregated by client sector and contract type (in thousands):
| Fiscal Year Ended |
| October 1, 2023 |  | October 2, 2022 |  | October 3, 2021 |
Client Sector: |  |  |  |  |  |
U.S. federal government (1) | $ | 1,387,101 |  |  | $ | 1,064,347 |  |  | $ | 1,081,608 |  |
U.S. state and local government | 607,074 |  |  | 603,286 |  |  | 536,309 |  |
U.S. commercial | 869,460 |  |  | 748,953 |  |  | 638,169 |  |
International (2) | 1,658,915 |  |  | 1,087,462 |  |  | 957,427 |  |
Total | $ | 4,522,550 |  |  | $ | 3,504,048 |  |  | $ | 3,213,513 |  |
Contract Type: |  |  |  |  |  |
Fixed-price | $ | 1,643,849 |  |  | $ | 1,317,993 |  |  | $ | 1,191,244 |  |
Time-and-materials | 2,166,671 |  |  | 1,637,019 |  |  | 1,492,813 |  |
Cost-plus | 712,030 |  |  | 549,036 |  |  | 529,456 |  |
Total | $ | 4,522,550 |  |  | $ | 3,504,048 |  |  | $ | 3,213,513 |  |
(1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from non-U.S. clients, primarily in Canada, Australia, Europe and the United Kingdom. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for fiscal 2023 and 2022. Contract Asset s 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 retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year. 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 (in thousands):
| Balance at
| October 1, 2023 |  | October 2, 2022
Contract assets (1) | $ | 113,939 |  |  | $ | 92,405 |
Contract liabilities | 335,044 |  |  | 241,340 |
Net contract liabilities | $ | (221,105) |  |  | $ | (148,935) |
(1) Includ es $6.8 million and $23.3 million of contract retentions at fiscal 2023 and 2022 year-ends, respectively. In fiscal 2023, we recognized revenue of approximately $164 million from amounts included in the contract liability balance at the end of fiscal 2022, compared to approximately $125 million in fiscal 2022. We recognize revenue primarily using the cost-to-cost measure of progress method to estimate 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, in fiscal 2023, we recognized net favorable revenue and operating income adjustments of $11.0 million. T he corresponding net revenue and operating income adjustments were immaterial for fiscal 2022. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded i mmediately in earn ings. As of October 1, 2023 and October 2, 2022, our consolidated balance sheets included liabilities for anticipated losses of $8.5 million and $10.0 million, respectively. The estimated cost to complete these related contracts at the end of fiscal 2023 and 2022 was approximately $68 million and $80 million, respectively. Accounts Receivable, Net Net accounts receivable consisted of the following (in thousands):
| Balance at
| October 1, 2023 |  | October 2, 2022
Billed | $ | 672,712 |  |  | $ | 491,700 |
Unbilled | 306,788 |  |  | 267,161 |
Total accounts receivable | 979,500 |  |  | 758,861 |
Allowance for doubtful accounts | (4,965) |  |  | (3,749) |
Total accounts receivable, net | $ | 974,535 |  |  | $ | 755,112 |
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. Substantially all of our unbilled receivables at fiscal 2023 year-end 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 condition s, which may affect our clients' ability to pay. Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at fiscal 2023 and 2022 year-ends. 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 h ad $4.8 billion of RUP Os as of October 1, 2023. RUPOs increase with awards from new contracts or additions to 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 fiscal 2023 year-end over the following periods (in thousands):
| Amount
Within 12 months | $ | 3,103,466 |
Beyond | 1,651,611 |
Total | $ | 4,755,077 |
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 -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 9 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-9 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-10 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-15 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-12 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 606 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Subparagraph (b)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479806/606-10-50-13 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 606 -Publisher FASB -URI https://asc.fasb.org//606/tableOfContent + Details
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