NOTE 8 - CONTRACTS

12 Months Ended

Dec. 29, 2012

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

NOTE 8 - CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at December 29, 2012 and December 31, 2011:

	2012			2011
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	51,649		$	43,455
Estimated earnings on uncompleted contracts		3,216			5,591
Earned revenues		54,865			49,046
Less: billings to date		55,855			46,677
Net costs/earnings in excess of billings on uncompleted contracts	$	(990	)	$	2,369
Costs and estimated earnings in excess of billings on uncompleted contracts	$	3,840		$	6,790
Billings in excess of costs/earnings on uncompleted contracts		(4,830	)		(4,421	)
Net costs/earnings in excess of billings on uncompleted contracts	$	(990	)	$	2,369

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 $4.4 million in contingency amounts as of December 29, 2012 compared to $5.5 million as of December 31, 2011. 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 have deferred revenue recognition until we receive either a written authorization or a payment. The current amount of revenue deferred for these reasons is $0.4 million as of December 29, 2012 compared to $0.3 million as of December 31, 2011.