Commitments and Contingencies
|9 Months Ended|
Sep. 30, 2011
|Commitments and Contingencies [Abstract]|
|Commitments and Contingencies||
(5) Commitments and Contingencies
We entered into an agreement (the “Agreement”) with a subcontractor in March 2011 to satisfy certain work share requirements. Under the terms of the Agreement, we are required to provide the subcontractor with certain levels of subcontracted work over two specified nine-month periods. The first period began March 1, 2011 and ends November 30, 2011. The second period begins December 1, 2011 and ends August 31, 2012. If the work share requirements are not fulfilled, then we are required to make a cash payment to the subcontractor of up to $750 thousand for each period. If a cash payment is made after the first nine- month period and we are able to provide a level of work during the second nine- month period that satisfies all or a portion of the work requirements for the combined eighteen months, we are entitled to a return of all or a portion of the cash payment. Under terms of the Agreement, we have placed $1.5 million in an escrow account to ensure cash payments to the subcontractor if the work share requirements are not satisfied. The escrowed funds are classified as other current assets on our September 30, 2011 financial statements.
Due to delays in contract awards and protests of contracts awarded to us, it is probable that we will not be able to provide any of the first period required work to the subcontractor by November 30, 2011. Accordingly, we have recorded an expense of $750 thousand due to the subcontractor on our financial statements as of September 30, 2011. We believe that we will be able to satisfy work share requirements for the second period as pending contract bids are awarded and protests are resolved.
We have, in the normal course of business, certain claims against us and against other parties and we may also be subject to various governmental investigations. In our opinion, the resolution of these claims and investigations will not have a material adverse effect on our results of operations or financial position. However, the results of any legal proceedings, including government investigations, cannot be predicted with certainty.
The entire disclosure for commitments and contingencies.
Reference 1: http://www.xbrl.org/2003/role/presentationRef