NOTE 5 - CONTRACTS

6 Months Ended

Jun. 30, 2012

Costs And Estimated Earnings And Billings On Uncompleted Contracts [Text Block]

NOTE 5 – CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at June 30, 2012 and December 31, 2011:

	June 30, 2012			December 31, 2011
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	42,845		$	43,455
Estimated earnings on uncompleted contracts	6,415			5,591
Earned revenues	49,260			49,046
Less: billings to date	39,256			46,677
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369
Costs and estimated earnings in excess of billings on uncompleted contracts	$	10,585		$	6,790
Billings in excess of costs and estimated earnings on uncompleted contracts	(581		)	(4,421		)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	10,004		$	2,369

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. Under this method, revenue 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. Losses on contracts are recorded in full as they are identified.

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 defer revenue recognition until we receive either a written authorization or a payment. The current amount of revenue deferred for these reasons is approximately $1.7 million as of June 30, 2012, compared to $0.3 million as of December 31, 2011. We expect a majority of the deferred revenue amount to be realized by year end 2012.