Contracts

12 Months Ended

Dec. 30, 2017

Contractors [Abstract]

Contracts

NOTE 5 - CONTRACTS

Costs, estimated earnings and billings on uncompleted contracts consist of the following at December 30, 2017 and December 31, 2016 (amounts in thousands):

	2017			2016
Costs incurred on uncompleted contracts	$	57,916		$	58,933
Estimated earnings on uncompleted contracts		15,423			24,694
Earned revenues		73,339			83,627
Less: billings to date		69,400			82,564
Net costs in excess of billings on uncompleted contracts	$	3,939		$	1,063
Costs and estimated earnings in excess of billings on uncompleted contracts	$	5,273		$	2,434
Billings in excess of costs and estimated earnings on uncompleted contracts		(1,334	)		(1,371	)
Net costs in excess of billings on uncompleted contracts	$	3,939		$	1,063

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 $1.0 million in contingency amounts as of December 30, 2017 compared to $0.9 million as of December 31, 2016. Losses on contracts are recorded in full as they are identified.

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 $0.4 million in deferred revenue recognition as of December 30, 2017 compared to $0.1 million as of December 31, 2016. This deferred revenue represents work on not to exceed contracts that has been performed but has not been billed nor been 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.