NOTE 5—INVENTORIES

Significant components of inventories are as follows (in thousands):


	September 30,		September 30,
	2016		2015

Finished products	$	10,018	$	644
Work in process and inventoried costs under long-term contracts		62,570		66,293
Materials and purchased parts		12,102		2,733
Customer advances		(18,328)		(5,970)
Net inventories	$	66,362	$	63,700

At September 30, 2016, work in process and inventoried costs under long-term contracts includes approximately $0.7 million in costs incurred outside the scope of work or in advance of a contract award, compared to $1.9 million as of September 30, 2015. We believe it is probable that we will recover the costs inventoried at September 30, 2016, plus a profit margin, under contract change orders or awards within the next year.

Costs we incur for certain U.S. federal government contracts include general and administrative costs as allowed by government cost accounting standards. The amounts remaining in inventory at September 30, 2016 and 2015 were $2.3 million and $1.8 million, respectively.