Costs, estimated earnings and billings on uncompleted contracts consisted of the following at June 30, 2011 and December 31, 2010:



	June 30, 2011			December 31, 2010
	(dollars in thousands)

Costs incurred on uncompleted contracts	$	46,750		$	60,812
Estimated earnings on uncompleted contracts	5,842			8,731
Earned revenues	52,592			69,543
Less: billings to date	49,044			65,647
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	3,548		$	3,896

Costs and estimated earnings in excess of billings on uncompleted contracts	$	5,663		$	5,129
Billings in excess of costs and estimated earnings on uncompleted contracts	(2,115		)	(1,233		)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	3,548		$	3,896

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. Under this method, revenue on long-term contracts is recognized in the ratio that contract costs incurred bear to total estimated contract costs. Revenue and gross margin on fixed-price contracts are subject to revision throughout the lives of the contracts and any required adjustments are made in the period in which the revisions become known. To manage unknown risks, management may use contingency amounts to increase the estimated costs, therefore, lowering the earned revenues until the risks are better identified and quantified or have been mitigated. We currently have $6.0 million in contingency as of June 30, 2011, of which $4.7 million is related to the new Caspian Pipeline Consortium (CPC) project awarded in 2011, compared to $0.8 million as of December 31, 2010. Losses on contracts are recorded in full as they are identified. $1.1 million of the contingency amount relates to projects that will be complete by fiscal year end and will be released to either cost or profit which is determined on a project by project basis.

The Company recognizes service revenue as soon as the services are performed. For clients that we consider higher risk, due to past payment history or history of not providing written work authorizations, we have deferred revenue recognition until we receive either a written authorization or a payment. The current amount of revenue deferred for these reasons is $0.3 million as of June 30, 2011, compared to $0.5 million as of December 31, 2010. We expect a majority of the deferred revenue amount to be realized by year end.