Revenues from Contracts with Customers

3 Months Ended

Sep. 30, 2021

Revenue From Contract With Customer [Abstract]

Revenues from Contracts with Customers

Note 6. Revenues from Contracts with Customers

Disaggregation of Revenues

The Company disaggregates revenues by contract type, customer type, prime vs. subcontractor, and whether the solution provided is primarily expertise or technology.  These categories represent how the nature, amount, timing, and uncertainty of revenues and cash flows are affected.

Disaggregated revenues by contract type were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
	Domestic		International		Total		Domestic		International		Total
Cost-plus-fee	$	893,713	$	—	$	893,713	$	823,609	$	—	$	823,609
Fixed-price		374,474		33,231		407,705		409,584		24,230		433,814
Time-and-materials		175,535		13,945		189,480		184,994		17,089		202,083
Total	$	1,443,722	$	47,176	$	1,490,898	$	1,418,187	$	41,319	$	1,459,506

Disaggregated revenues by customer type were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
	Domestic		International		Total		Domestic		International		Total
Department of Defense	$	1,000,127	$	—	$	1,000,127	$	1,004,195	$	—	$	1,004,195
Federal Civilian agencies		413,664		—		413,664		390,179		—		390,179
Commercial and other		29,931		47,176		77,107		23,813		41,319		65,132
Total	$	1,443,722	$	47,176	$	1,490,898	$	1,418,187	$	41,319	$	1,459,506

Disaggregated revenues by prime vs. subcontractor were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
	Domestic		International		Total		Domestic		International		Total
Prime contractor	$	1,298,653	$	42,906	$	1,341,559	$	1,288,705	$	38,133	$	1,326,838
Subcontractor		145,069		4,270		149,339		129,482		3,186		132,668
Total	$	1,443,722	$	47,176	$	1,490,898	$	1,418,187	$	41,319	$	1,459,506

Disaggregated revenues by expertise or technology were as follows (in thousands):

	Three Months Ended						Three Months Ended
	September 30, 2021						September 30, 2020
	Domestic		International		Total		Domestic		International		Total
Expertise	$	683,624	$	19,422	$	703,046	$	723,197	$	17,486	$	740,683
Technology		760,098		27,754		787,852		694,990		23,833		718,823
Total	$	1,443,722	$	47,176	$	1,490,898	$	1,418,187	$	41,319	$	1,459,506

Changes in Estimates

The Company recognizes revenues on many of its fixed price, award fee, and incentive fee arrangements over time primarily using a cost-to-cost input method based on the ratio of costs incurred to date to total estimated costs at completion. The process requires the Company to use professional judgment when assessing risks, estimating contract revenues and costs, estimating variable consideration, and making assumptions for schedule and technical issues.  The Company periodically reassesses its assumptions and updates its estimates as needed.  When estimates of total costs to be incurred on a contract exceed total revenues, a provision for the entire loss on the contract is recorded in the period in which the loss is determined.

Aggregate net changes in estimates for the three months ended September 30, 2021 reflected an increase to income before income taxes of $2.8 million ($0.09 per diluted share), compared with $7.8 million ($0.22 per diluted share) for the three months ended September 30, 2020.  The Company uses its statutory tax rate when calculating the impact to diluted earnings per share.

Revenues recognized from previously satisfied performance obligations were immaterial for the three months ended September 30, 2021 and 2020.  The change in revenues generally relates to final true-up adjustments for estimated award or incentive fees in the period in which the customer’s final performance score was received or when it can be determined that more objective, contractually-defined criteria have been fully satisfied.  

Remaining Performance Obligations

Remaining performance obligations (RPO) represent the expected revenues to be recognized for the satisfaction of remaining performance obligations on existing contracts.  This balance excludes unexercised contract option years and task orders that may be issued underneath an Indefinite Delivery/Indefinite Quantity (IDIQ) vehicle until such task orders are awarded.  The RPO balance generally increases with the execution of new contracts and converts into revenues as contractual performance obligations are satisfied. The Company continues to monitor this balance as it is subject to change from execution of new contracts, contract modifications or extensions, government deobligations, or early terminations.

As of September 30, 2021, the Company had $7.5 billion of RPO and expects to recognize approximately 80 percent over the next twelve months with the remainder to be recognized thereafter.