NOTE 2 - CONTRACTS

3 Months Ended

Mar. 26, 2016

Contractors [Abstract]

Long-term Contracts or Programs Disclosure [Text Block]

NOTE 2 – CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consisted of the following at March 26, 2016 and December 26, 2015:

	March 26, 2016			December 26, 2015
	(dollars in thousands)
Costs incurred on uncompleted contracts	$	54,729		$	67,488
Estimated earnings (losses) on uncompleted contracts		22,237			27,492
Earned revenues		76,966			94,980
Less: billings to date		77,394			94,830
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	(428	)	$	150
Costs and estimated earnings in excess of billings on uncompleted contracts	$	3,520		$	4,062
Billings in excess of costs and estimated earnings on uncompleted contracts		(3,948	)		(3,912	)
Net costs and estimated earnings in excess of billings on uncompleted contracts	$	(428	)	$	150

Revenue on fixed-price contracts is recorded primarily using the percentage-of-completion (cost-to-cost) method. 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 $2.1 million in contingency amounts as of March 26, 2016 compared to $2.4 million as of December 26, 2015. Losses on contracts are recorded in full as they are identified. Fixed price contracts generally include retainage provisions under which a percentage of the contract price is withheld until the project is complete and has been accepted by our customer.  We currently have $6.4 million in retainage as of March 26, 2016 compared to $6.9 million as of December 26, 2015.

We recognize 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. We currently have $0.1 million in deferred revenue recognition as of March 26, 2016 compared to $0.1 million as of December 26, 2015. This deferred revenue represents work on not–to-exceed contracts that has been performed but has not been billed or booked as revenue due to our revenue recognition policies as the work was performed outside the contracted amount without obtaining proper work order changes. It is uncertain as to whether these revenues will eventually be recognized by us or the proceeds collected. The costs associated with these billings have been expensed as incurred.