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Revenue and Contract Balances
 9 Months Ended
Jun. 27, 2021
Revenue from Contract with Customer [Abstract]  
Revenue and Contract Balances Revenue and Contract Balances
Disaggregation of Revenue

We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables present revenue disaggregated by client sector and contract type:
 Three Months EndedNine Months Ended
 June 27,
2021		June 28,
2020		June 27,
2021		June 28,
2020
 (in thousands)
Client Sector:  
U.S. state and local government$135,717 $97,163 $390,464 $324,670 
U.S. federal government (1)
265,999 243,414 799,560 731,977 
U.S. commercial153,100 168,491 454,607 510,770 
International (2)
246,817 200,703 676,869 674,110 
Total$801,633 $709,771 $2,321,500 $2,241,527 
Contract Type:
Fixed-price$294,568 $275,810 $841,118 $802,477 
Time-and-materials379,705 309,123 1,082,143 1,047,900 
Cost-plus127,360 124,838 398,239 391,150 
Total$801,633 $709,771 $2,321,500 $2,241,527 
(1)     Includes revenue generated under U.S. federal government contracts performed outside the United States.
(2) Includes revenue generated from foreign operations, primarily in Canada, Australia, the United Kingdom, and revenue generated from non-U.S. clients.

Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three and nine months ended June 27, 2021 and June 28, 2020.

Contract Assets and Contract Liabilities

We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance.

Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year.

Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following:

Balance at
June 27,
2021		September 27, 2020
(in thousands)
Contract assets (1)
$91,405 $92,632 
Contract liabilities(179,127)(171,905)
Net contract liabilities$(87,722)$(79,273)
(1)     Includes $8.5 million and $12.3 million of contract retentions as of June 27, 2021 and September 27, 2020, respectively.
In the first nine months of fiscal 2021 and 2020, we recognized revenue of approximately $108 million and $106 million, respectively, from amounts included in the contract liability balances at the end of fiscal 2020 and 2019, respectively.

We recognize revenue primarily using the cost-to-cost measure of progress to estimate progress towards completion. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, we recognized net favorable operating income adjustments of $1.7 million and $2.8 million in the third quarter and first nine months of fiscal 2021, respectively, compared to a net unfavorable adjustment of $2.8 million in the first nine months of fiscal 2020 (all in the second quarter). Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. As of June 27, 2021 and September 27, 2020, our consolidated balance sheets included liabilities for anticipated losses of $8.0 million and $13.2 million, respectively. The estimated cost to complete these related contracts as of June 27, 2021 and September 27, 2020 was approximately $81 million and $118 million, respectively.

Accounts Receivable, Net

Net accounts receivable consisted of the following:

Balance at
 June 27,
2021		September 27,
2020
(in thousands)
Billed$431,613 $402,818 
Unbilled236,174 253,364 
Total accounts receivable667,787 656,182 
Allowance for doubtful accounts(3,394)(7,147)
Total accounts receivable, net$664,393 $649,035 

Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Substantially all of our unbilled receivables at June 27, 2021 are expected to be billed and collected within 12 months. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and industry conditions, including the potential impacts of the coronavirus disease 2019 ("COVID-19") pandemic, that may affect our clients' ability to pay. The $3.8 million decline in our allowance for doubtful accounts in the first nine months of fiscal 2021 primarily reflects the collection of accounts receivable we previously determined were likely uncollectible related to our Canadian turn-key pipeline activities that we decided to dispose of in the fourth quarter of fiscal 2019.

Total accounts receivable at June 27, 2021 and September 27, 2020 included approximately $11 million for each period (all in our Remediation Construction Management ("RCM") segment), related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. Claims are amounts in excess of agreed contract prices that we seek to collect from our clients or other third parties for delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. Factors considered in determining whether revenue associated with claims (including change orders in dispute and unapproved change orders in regards to both scope and price) should be recognized include the following: (a) the contract or other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and not the result of deficiencies in our performance, (c) claim-related costs are identifiable and considered reasonable in view of the work performed, and (d) evidence supporting the claim is objective and verifiable. This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period when a client agreement is obtained, or a claims resolution occurs.

We regularly evaluate all unsettled claim amounts and record appropriate adjustments to revenue when it is probable that the claim will result in a different contract value than the amount previously estimated. In the first nine months of fiscal 2021 (all in the second quarter), we recognized increases to revenue and related gains of $2.8 million in our Commercial/
International Services Group ("CIG"). In the first nine months of fiscal 2020, we recorded net losses in operating income related to claims of $4.4 million in our CIG segment.

No single client accounted for more than 10% of our accounts receivable at June 27, 2021 and September 27, 2020.

Remaining Unsatisfied Performance Obligations (“RUPOs”)

Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $3.2 billion of RUPOs as of June 27, 2021. RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached.

We expect to satisfy our RUPOs as of June 27, 2021 over the following periods:
Amount
(in thousands)
Within 12 months$1,950,987 
Beyond 1,280,146 
Total $3,231,133 

Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days).