<SEC-DOCUMENT>0001144204-17-061924.txt : 20180226
<SEC-HEADER>0001144204-17-061924.hdr.sgml : 20180226
<ACCEPTANCE-DATETIME>20171201161103
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001144204-17-061924
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20171201

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BARRETT BUSINESS SERVICES INC
		CENTRAL INDEX KEY:			0000902791
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-HELP SUPPLY SERVICES [7363]
		IRS NUMBER:				520812977
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		8100 NE PARKWAY DRIVE
		STREET 2:		SUITE 200
		CITY:			VANCOUVER
		STATE:			WA
		ZIP:			98662
		BUSINESS PHONE:		(800) 494-5669

	MAIL ADDRESS:	
		STREET 1:		8100 NE PARKWAY DRIVE
		STREET 2:		SUITE 200
		CITY:			VANCOUVER
		STATE:			WA
		ZIP:			98662
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<P STYLE="margin: 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">[BBSI Letterhead]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">December 1, 2017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>VIA EDGAR</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Mr. Larry Spirgel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Assistant Director</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Office of Telecommunications</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">U.S. Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">Division of Corporation Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>Re:</B></TD><TD><B>Barrett Business Services, Inc.<BR>
Form 10-K for Fiscal Year Ended December 31, 2016<BR>
Filed March 15, 2017<BR>
File No. 000-21886</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: -0.25in">Dear Mr. Spirgel:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">This letter responds to your letter dated November&nbsp;2, 2017,
with respect to the review by the staff (the &ldquo;Staff&rdquo;) of the Securities and Exchange Commission (the &ldquo;Commission&rdquo;)
regarding the Form 10-K filed by Barrett Business Services, Inc. (the &ldquo;Company&rdquo;, &ldquo;BBSI&rdquo; or &ldquo;we&rdquo;)
for the year ended December 31, 2016. For the Staff's convenience, the comment in your letter is repeated below, followed by our
response.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><U>Management&rsquo;s Discussion and Analysis of Financial Condition
and Results of Operations </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><U>Results of Operations, page 36 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in">&nbsp;</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Given that under GAAP you report PEO revenues on a net basis, it appears that your tabular presentation of non-GAAP total gross
revenues and total gross cost of revenues is not appropriate since it is inconsistent with Question 100.04 of the CD&amp;I on Non-GAAP
measures issued on May 17, 2016. In addition, it appears that it is not appropriate to characterize gross amounts as revenue. Please
also comply with this comment in your next earnings release.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><U>Response</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We acknowledge the Staff&rsquo;s comment and have considered Question
100.04 of the C&amp;DI on Non-GAAP measures issued on May 17, 2016 (&ldquo;Question&nbsp;100.04&rdquo;). This question relates
to individually tailored recognition and measurement methods, and specifically violation of Rule 100(b) of Regulation G, which
states:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B><I>Rule 100(b) of Regulation G</I></B><I><BR>
A&nbsp;registrant, or a person acting on its behalf, shall not make public a non-GAAP financial measure that, taken together with
the information accompanying that measure and any other accompanying discussion of that measure, contains an untrue statement of
a material fact or omits to state a material fact necessary in order to make the presentation of the non-GAAP financial measure,
in light of the circumstances under which it is presented, not misleading. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">BBSI presents its professional employer services (&ldquo;PEO&rdquo;)
revenue on a net basis in accordance with ASC 605-45; however, the gross activity of the Company is a key performance metric for
management as well as investors and other financial statement users. We believe that disclosing gross amounts does not substitute
an individually tailored accounting method, but rather uses a defined metric to provide important insight into the level of activity
of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Our disclosure documents filed with the Commission are prepared
consistent with our understanding of the interpretations and other guidance published by the Staff, and we enhanced our disclosure
with respect to non-GAAP financial measures following the release of the updated C&amp;DI in 2016. We believe that the presentation
of gross revenue amounts, taken together with the related language in our disclosure, does not present an untrue statement of material
fact as proscribed by Rule 100(b). We respectfully note that ASC 605-45-50-1 acknowledges that disclosure of gross amounts may
be useful when revenue is presented net, as described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in"><B><I>ASC 605-45-50-1</I></B><I><BR>
Voluntary disclosure of gross transaction volume for those revenues reported net may be useful to users of financial statements.
Such disclosure can be made parenthetically in the income statement or in the notes to the financial statements. However, if gross
amounts are disclosed on the face of the income statement, they shall not be characterized as revenues (a description such as gross
billings may be appropriate), nor shall they be reported in a column that sums to net income or loss. (This does not apply to the
disclosure of taxes collected and remitted to governmental authorities; see paragraphs&nbsp;605-45-50-3 through 50-4.)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Given the nature of BBSI&rsquo;s operations, gross revenue is the
primary driver of the two most significant expense categories presented on our income statement: Payroll taxes and benefits and
Workers&rsquo; compensation. Management, as well as our investors and stakeholders, consistently use our gross revenue amounts
to assess the fundamental performance of our business. As an example, management uses gross amounts in our budgets and operating
forecasts as well as in establishing executive compensation performance goals. Similarly, investors regularly review our workers&rsquo;
compensation expense as a percentage of gross revenue as this is the measure that is closest to reflecting volume of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">BBSI has been thoughtful in our presentation of gross revenue to
provide information about the volume of our business that our investors and other financial statement users find important while
not confusing that presentation with our GAAP revenue amounts. ASC 605-45-50-1 permits the disclosure of gross amounts but indicates
that gross amounts should not be characterized as &ldquo;revenue&rdquo; if they are disclosed on the face of the income statement.
BBSI does not present gross amounts of PEO revenue on the face of the income statement, nor do we present gross amounts of PEO
revenue in a column that sums to net income or loss. We do not modify the gross revenue or cost of revenue amounts to accelerate,
defer or otherwise tailor the metrics in any way for BBSI. As such, we respectfully submit that ASC 605-45-50-1 acknowledges that
gross revenue amounts may be a useful disclosure and establishes gross revenue as an acceptable and defined metric for disclosure,
such that it should not be considered an &ldquo;individually tailored&rdquo; method as described in Question 100.04.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Notwithstanding, the Company will modify its disclosure in future
filings in order to provide additional clarity about the reasons for reporting the gross revenue metric. Below is an example of
the revised disclosure to be included in future filings, based on the last paragraph on page 19 and the first full paragraph on
page 20 of our Form 10-Q for the period ended September 30, 2017.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We report PEO revenues on a net basis because we are not the primary
obligor for the services provided by our co-employed clients to their customers pursuant to our client service agreements. <STRIKE>We
present for comparison purposes</STRIKE> <U>Although not in accordance with GAAP, management believes that gross PEO revenue is
informative as to the volume of our business activity and serves as an important performance metric in managing our operations,
including the preparation of our internal operating forecasts and establishing corporate performance targets for our annual cash
incentive award program and awards of performance shares for our executive officers. We therefore present for purposes of analysis</U>
the gross revenues and cost of revenues information for the three and nine months ended September&nbsp;30, 2017 and 2016 in the
table below. <STRIKE>Although not in accordance with GAAP, management believes this information is informative as to the level
of our business activity and illustrative of how we manage our operations, including the preparation of our internal operating
forecasts, because it presents our professional employer services on a basis comparable to our staffing services.</STRIKE></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The presentation of <U>PEO</U> revenues on a net basis and <STRIKE>the
relative contributions of</STRIKE> staffing <STRIKE>and professional employer</STRIKE> services revenues <STRIKE>can create</STRIKE>
<U>on a gross basis causes</U> volatility in our gross margin percentage<STRIKE>. The general impact of fluctuations</STRIKE> <U>as
those revenue amounts change over time. Fluctuations</U> in our revenue mix <STRIKE>is described below</STRIKE> <U>generally have
the following effects:</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">A relative increase in professional employer services revenue will
result in a higher gross margin percentage. Improvement in gross margin percentage occurs because incremental client services revenue
dollars are reported as revenue net of all related direct payroll and safety incentive costs.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49pt; text-indent: -24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 24.5pt"></TD><TD STYLE="width: 24.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">A relative increase in staffing revenues will typically result in
a lower gross margin percentage. Staffing revenues are presented at gross with the related direct costs reported in cost of revenues.
</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49pt; text-indent: -24.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 49pt; text-indent: -24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We do not propose to modify the tabular presentations regarding
our gross revenue metric and reconciliation to GAAP amounts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">We appreciate the Staff&rsquo;s review and consideration of the
Company&rsquo;s response. If you have any questions or comments regarding our response, please contact me by telephone at (360)
869-4012 or by facsimile at (360) 828-0705.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Sincerely,</FONT></TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/ Gary Kramer</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Gary Kramer</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Chief Financial Officer</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">8100 NE Parkway Drive, Suite 200&nbsp;&nbsp;&nbsp;Vancouver,
WA 98662&nbsp;&nbsp;&nbsp;360.828.0700</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">www.barrettbusiness.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>


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