Revenue Recognition

9 Months Ended

Jun. 30, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

We recognize revenue over time when there is a continuous transfer of control to our customer. For our U.S. government contracts, this continuous transfer of control to the customer is supported by clauses in the contract that allow the U.S. government to unilaterally terminate the contract for convenience, pay us for costs incurred plus a reasonable profit and take control of any work in process. When control is transferred over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. For services contracts, we satisfy our performance obligations as services are rendered. We use a cost-based input method to measure progress.

Contract costs include labor, material and allocable indirect expenses. For time-and-material contracts, we bill the customer per labor hour and per material, and revenue is recognized in the amount invoiced since the amount corresponds directly to the value of our performance to date. We consider control to transfer when we have a present right to payment. Essentially, all of our contracts satisfy their performance obligations over time. Contracts are often modified to account for changes in contract specifications and requirements. Contract modifications impact performance obligations when the modification either creates new or changes the existing enforceable rights and obligations. The effect of a contract modification on the transaction price and our measure of progress for the performance obligation to which it relates is recognized as an adjustment to revenue and profit cumulatively. Furthermore, a significant change in one or more estimates could affect the profitability of our contracts. We recognize adjustments in estimated profit on contracts in the period identified.

For time-and-materials contracts, revenue is recognized to the extent of billable rates times hours delivered plus materials and other reimbursable costs incurred. Revenue for cost-reimbursable contracts is recorded as reimbursable costs are incurred, including an estimated share of the applicable contractual fees earned. Contract costs are expensed as incurred. Estimated losses are recognized when identified.

Contract assets - Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms. In part, revenue recognition occurs before we have the right to bill, resulting in contract assets. These contract assets are reported within receivables, net on our consolidated balance sheets and are invoiced in accordance with payment terms defined in each contract. Period end balances will vary from period to period due to agreed-upon contractual terms.

Contract liabilities - Amounts are a result of billings in excess of costs incurred. These contract liabilities are reported within accounts payable, accrued expenses, and other current liabilities on our consolidated balance sheets.

    The following table summarizes the contract balances recognized on the Company's consolidated balance sheets:

	(in thousands)
	June 30,		September 30,
	2021		2020
Contract assets	$	6,084	$	7,943
Contract liabilities	$	355	$	200

Disaggregation of revenue from contracts with customers

We disaggregate our revenue from contracts with customers by customer, contract type, as well as whether the Company acts as prime contractor or subcontractor. We believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following tables present our revenue disaggregated by these categories:

Revenue by customer (in thousands):

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Department of Veterans Affairs	$	27,496	$	24,783	$	83,010	$	74,402
Department of Health and Human Services	23,245		23,312		66,748		73,263
Department of Defense	7,601		270		22,103		943
Other	3,213		3,094		9,052		9,887
Total Revenue	$	61,555	$	51,459	$	180,913	$	158,495

Revenue by contract type (in thousands):

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Time and Materials	$	46,790	$	36,315	$	137,492	$	110,918
Cost Reimbursable	12,070		13,841		35,796		43,887
Firm Fixed Price	2,695		1,303		7,625		3,690
Total Revenue	$	61,555	$	51,459	$	180,913	$	158,495

Revenue by whether the Company acts as a prime contractor or a subcontractor (in thousands):

	Three Months Ended				Nine Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Prime Contractor	$	53,407	$	47,649	$	159,059	$	147,464
Subcontractor	8,148		3,810		21,854		11,031
Total Revenue	$	61,555	$	51,459	$	180,913	$	158,495