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Contracts with Customers
 9 Months Ended
Sep. 30, 2024
Revenue from Contract with Customer [Abstract]  
Contracts with Customers
5.
Contracts with Customers

Disaggregation of Revenue

The Company’s contracts contain both fixed-price and cost reimbursable components. Contract types are based on the component that represents the majority of the contract. The following table presents revenue disaggregated by contract type (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Fixed-price

 

$

790,820

 

 

$

452,606

 

 

$

2,129,274

 

 

$

1,233,712

 

Time-and-Materials

 

 

354,114

 

 

 

355,689

 

 

 

1,052,040

 

 

 

998,037

 

Cost-plus

 

 

665,182

 

 

 

610,276

 

 

 

1,834,945

 

 

 

1,716,774

 

Total

 

$

1,810,116

 

 

$

1,418,571

 

 

$

5,016,259

 

 

$

3,948,523

 

 

See “Note 18 – Segments Information” for the Company’s revenues by business lines.

Contract Assets and Contract Liabilities

Contract assets and contract liabilities balances at September 30, 2024 and December 31, 2023 were as follows (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

$ change

 

 

% change

 

Contract assets

 

$

790,001

 

 

$

757,515

 

 

$

32,486

 

 

 

4.3

%

Contract liabilities

 

 

300,799

 

 

 

301,107

 

 

 

(308

)

 

 

-0.1

%

Net contract assets (liabilities) (1)

 

$

489,202

 

 

$

456,408

 

 

$

32,794

 

 

 

7.2

%

 

(1)
Total contract retentions included in net contract assets (liabilities) were $82.5 million as of September 30, 2024, of which $33.5 million are not expected to be paid in the next 12 months. Total contract retentions included in net contract assets (liabilities) were $73.8 million as of December 31, 2023. Contract assets at September 30, 2024 and December 31, 2023 include $69.2 million and $109.5 million, respectively, related to net claim recoveries. There was a $21.6 million loss recognized for the three and nine months ended September 30, 2024 and no material losses recognized for the three and nine months ended September 30, 2023, related to the collectability of claims.

During the three months ended September 30, 2024 and September 30, 2023, the Company recognized revenue of $10.7 million and $8.9 million, respectively, and $179.9 million and $116.6 million during the nine months ended September 30, 2024 and September 30, 2023, respectively that was included in the corresponding contract liability balances at December 31, 2023 and December 31, 2022, respectively. Certain changes in contract assets and contract liabilities consisted of the following (in thousands):

 

 

 

September 30, 2024

 

 

December 31, 2023

 

Acquired contract assets

 

$

3,209

 

 

$

2,715

 

Acquired contract liabilities

 

 

-

 

 

 

3,155

 

There was no significant impairment of contract assets recognized during the three and nine months ended September 30, 2024 and September 30, 2023.

The following table presents revisions in estimates, such as changes in estimated claims or incentives, related to performance obligations partially satisfied in previous periods that individually had an impact of $5 million or more on revenue. In certain instances, revisions in estimates on a contract do not exceed the threshold in any particular quarter but exceed the threshold on a year-to-date basis (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Revenue impact, net

 

$

(21,626

)

 

$

-

 

 

$

(35,129

)

 

$

4,748

 

Certain financial statement impacts from revisions in estimates were as follows (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

Operating income (loss)

 

$

(23,520

)

 

$

-

 

 

$

(37,023

)

 

$

(3,079

)

Net income (loss)

 

 

(17,569

)

 

 

-

 

 

 

(27,656

)

 

 

(2,291

)

Diluted income (loss) per share

 

$

(0.16

)

 

$

-

 

 

$

(0.26

)

 

$

(0.02

)

The amounts in the table above include changes in estimates related to direct costs of contracts of $1.9 million for both the three and nine months ended September 30, 2024 and $6.4 million for the nine months ended September 30, 2023, related to write-downs on a contract in the Critical Infrastructure segment.

Accounts Receivable, net

Accounts receivable, net consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):

 

 

 

2024

 

 

2023

 

Billed

 

$

617,761

 

 

$

646,375

 

Unbilled

 

 

421,101

 

 

 

273,215

 

   Total accounts receivable, gross

 

 

1,038,862

 

 

 

919,590

 

Allowance for doubtful accounts

 

 

(3,886

)

 

 

(3,952

)

   Total accounts receivable, net

 

$

1,034,976

 

 

$

915,638

 

 

Billed accounts receivable represents amounts billed to clients that have not been collected. Unbilled accounts receivable represents amounts where the Company has a present contractual right to bill but an invoice has not been issued to the customer at the period-end date. Receivables from contracts with the U.S. federal government and its agencies were 16% and 18% as of September 30, 2024 and December 31, 2023, respectively.

The allowance for doubtful accounts was determined based on consideration of trends in actual and forecasted credit quality of clients, including delinquency and payment history, type of client, such as a government agency or commercial sector client, and general economic conditions and particular industry conditions that may affect a client’s ability to pay.

Transaction Price Allocated to the Remaining Unsatisfied Performance Obligations

The Company’s remaining unsatisfied performance obligations (“RUPO”) as of September 30, 2024 represent a measure of the total dollar value of work to be performed on contracts awarded and in-progress. The Company had $6.7 billion in RUPO as of September 30, 2024.

RUPO will increase with awards of new contracts and decrease as the Company performs work and recognizes revenue on existing contracts. Projects are included within RUPO at such time the project is awarded and agreement on contract terms has been reached. The difference between RUPO and backlog relates to unexercised option years that are included within backlog and the value of Indefinite Delivery/Indefinite Quantity (“IDIQ”) contracts included in backlog for which delivery orders have not been issued.

RUPO is comprised of: (a) original transaction price, (b) change orders for which written confirmations from our customers have been received, (c) pending change orders for which the Company expects to receive confirmations in the ordinary course of business, and (d) claim amounts that the Company has made against customers for which it has determined that it has a legal basis under existing contractual arrangements and a significant reversal of revenue is not probable, less revenue recognized to-date.

The Company expects to satisfy its RUPO as of September 30, 2024 over the following periods (in thousands):

 

 Period RUPO Will Be Satisfied

 

Within One Year

 

 

Within One to
Two Years

 

 

Thereafter

 

 Federal Solutions

 

$

1,870,032

 

 

$

543,038

 

 

$

207,797

 

 Critical Infrastructure

 

 

1,983,920

 

 

 

1,085,300

 

 

 

969,038

 

    Total

 

$

3,853,951

 

 

$

1,628,338

 

 

$

1,176,834