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Revenue Recognition
 12 Months Ended
Dec. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

NOTE 11 – REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from clients, most of which is earned over time, into categories that depict how the nature, amount and uncertainty of revenue and cash flows are affected by economic factors. Those categories are client market, client type and contract mix. Client markets provide insight into the breadth of the Company’s expertise. In classifying revenue by client market, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market. The Company also classifies revenue by the type of entity for which it does business, which is an indicator of the diversity of its client base. The Company attributes revenue generated as a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Disaggregation by contract mix provides insight in terms of the degree of performance risk that the Company has assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as the Company is required to deliver a scope of work or level of effort for a negotiated fixed price. Time-and-materials contracts require the Company to provide skilled employees on contracts for negotiated fixed hourly rates. Since the Company is not required to deliver a scope of work, but merely skilled employees, it considers these contracts to be less risky than a fixed-price agreement. Cost-based contracts are considered to provide the lowest amount of performance risk since the Company is generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements.  

 

 

Year ended December 31,

 

 

2020

 

 

2019

 

 

2018

 

Client Markets:

 

 

 

 

 

 

 

 

 

 

 

Energy, environment, and infrastructure

$

616,296

 

 

$

663,799

 

 

$

564,736

 

Health, education, and social programs

 

670,618

 

 

 

567,351

 

 

 

535,578

 

Safety and security

 

117,979

 

 

 

118,279

 

 

 

111,660

 

Consumer and financial

 

101,982

 

 

 

129,096

 

 

 

125,999

 

Total

$

1,506,875

 

 

$

1,478,525

 

 

$

1,337,973

 

 

 

Year ended December 31,

 

 

2020

 

 

2019

 

 

2018

 

Client Type:

 

 

 

 

 

 

 

 

 

 

 

U.S. federal government

$

666,961

 

 

$

560,953

 

 

$

546,050

 

U.S. state and local government

 

222,730

 

 

 

279,833

 

 

 

183,900

 

International government

 

95,734

 

 

 

122,125

 

 

 

122,186

 

Total Government

 

985,425

 

 

 

962,911

 

 

 

852,136

 

Commercial

 

521,450

 

 

 

515,614

 

 

 

485,837

 

Total

$

1,506,875

 

 

$

1,478,525

 

 

$

1,337,973

 

 

 

Year ended December 31,

 

 

2020

 

 

2019

 

 

2018

 

Contract Mix:

 

 

 

 

 

 

 

 

 

 

 

Time-and-materials

$

749,844

 

 

$

700,980

 

 

$

581,446

 

Fixed-price

 

529,157

 

 

 

566,299

 

 

 

526,751

 

Cost-based

 

227,874

 

 

 

211,246

 

 

 

229,776

 

Total

$

1,506,875

 

 

$

1,478,525

 

 

$

1,337,973

 

 

 

Contract Balances:

Contract assets consist primarily of unbilled amounts resulting from contracts when revenue recognized exceeds the amount billed due to billing schedule timing. Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on contracts due to billing schedule timing. The $3.6 million decrease in the Company’s net contract assets is due to a decline in international marketing services, which were impacted by COVID-19, and decreases in hurricane relief and rebuild work for U.S. state and local governments offset by an increase in U.S. federal government work, which are part of the contracts acquired under the ITG acquisition, and an increase in our international government work. There were no material changes to contract balances due to impairments or business combinations during the period. During the year ended December 31, 2020 and 2019, the Company recognized $24.7 million and $23.0 million in revenue related to the contract liabilities balance at December 31, 2019 and 2018, respectively.

 

 

December 31, 2020

 

 

December 31, 2019

 

 

Change

 

Contract assets

$

143,369

 

 

$

142,337

 

 

$

1,032

 

Contract liabilities

 

(42,050

)

 

 

(37,413

)

 

 

(4,637

)

Net contract assets

$

101,319

 

 

$

104,924

 

 

$

(3,605

)

Performance Obligations:

The Company had $1.7 billion in unfulfilled performance obligations as of December 31, 2020, which primarily entail the future delivery of services for which revenue will be recognized over time. The obligations relate to continued or additional services required on contracts and were generally valued using an estimated cost-plus margin approach, with variable consideration being estimated at the most likely amount.  The Company expects to satisfy these performance obligations, on average, in one to two years.