Long-term contracts - Note 3

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Long-term contracts - Note 3

3. Long-term contracts

Cost and estimated earnings in excess of billings on uncompleted contracts comprises amounts of revenue recognized on contracts that we have not yet billed to customers because the amounts were not contractually billable at December 31, 2011 and 2010. The following table summarizes when we will be contractually able to bill the balance as of December 31, 2011 and 2010.

		Year Ended December 31,
		2011		2010
Billable within 30 days	$	63,000	$	130,000
Billable between 31 and 90 days		-		-
Billable after 90 days		7,000		7,000
	$	70,000	$	137,000

Our current contracts with the U.S. government are primarily cost-plus-fixed-fee type contracts. Under the terms of a cost-plus-fixed-fee contract, the U.S. government reimburses us for negotiated actual direct and indirect cost incurred in performing the contracted services. We are not obligated to spend more than the contract value to complete the contracted services. The period of performance is generally one year. Each of our contracts with the U.S. government can be terminated for convenience by the government at any time. To date, the U.S. government has not terminated a contract with us.

The following table summarizes the costs incurred on our revenue contracts:

		December 31,
		2011		2010
Costs and estimated earnings incurred on uncompleted contracts	$	1,822,000	$	3,266,000
Billings on uncompleted contracts		(1,908,000)		(3,210,000)
	$	(86,000)	$	56,000
Included in accompanying consolidated balance sheets under the following captions:
Costs and estimated earnings in excess of billings on uncompleted
contracts	$	70,000	$	137,000
Billings in excess of costs and estimated earnings on uncompleted
contracts		(156,000)		(81,000)
	$	(86,000)	$	56,000