Heather Balsky: That’s really helpful. And then my other question is actually on government. Current sort of potential shutdown aside, just what you’re seeing in terms of spend and procurement? I know if we go back a year ago, there have been some delays in procurement. I’m curious if there’s been any kind of improvement? Are they kind of back to a more normalized spending cycle? Or is — maybe bringing in the potential shutdown is all the kind of stuff going on, creating some disruption and how they’re spending?
Theodore Hanson: I don’t think the continuing resolutions have caused that we’re under right now any kind of disruption, if you will. I think we saw normal as much as we could, it could be normal, fairly normal into the government fiscal year in Q3. We — our bookings were higher at $500 million. Our book-to-bill at 1.5 was a good number and a very good number and higher than we’ve been running it’s about as we anticipated. And we’ll watch the other peer groups, peer companies’ release, but I expect them to have good results as it relates to new bookings. So I think on that front, Heather, even though we’ve got some wobbliness here going on and what’s going on with the continuing resolution and some of those uncertainties that you saw a pretty healthy and good flow of contract awards in that federal government space during the third quarter, at the end of the government fiscal year.
Operator: And our next question comes from Surinder Thind with Jefferies.
Surinder Thind: I guess just a couple of clarifications on some earlier commentary. The first being the comments around just kind of clients elongating projects at this point. Are you able to quantify that in any manner? Are these 9 to 12 months projects that are now maybe being realized over 15 months? Or just — how should we think about that? And then in terms of the context, obviously, around what — how to interpret the bookings number there?
Theodore Hanson: Yes. Well, I think that you, for sure, are seeing stuff like that. We’ve seen that typically, we’re around 12 months on these projects on average for the commercial consulting team that now is leaking further out, whether it’s 15 months or 16 months or would have you, it’s definitely slowing. And I think it correlates with the fact that we’re still getting solid bookings and book-to-bill numbers, but it’s just yielding a lower growth rate. And our bill rates, I will just tell you anecdotally, are slightly up. So it’s not a bill rate issue. It’s a hours applied or hours billed phenomenon there.
Randolph Blazer: And is it also, Surinder, worth mentioning that none of this is new, we reported the same thing in the second quarter. And by the way, as quickly as it could slow down, it could also accelerate.
Surinder Thind: Got it. So the idea that the elongation process has stabilized at this point? Or is it that if we were to rewind a year ago when this first kind of started the 12 months was 13 to 14 months and now — and then last quarter, it was 14, 15 months and now it’s 15, 16 months. How should we think about that? Or is this…
Theodore Hanson: That’s — that would take a crystal ball, right? I think that’s up to the client. I mean, I think we’ve seen for 2 quarters here, a similar trend to Rand’s point. We don’t see that it will change in the fourth quarter. So that will be 3 quarters. Although this, again, more to come, we’ll have to watch this fourth quarter and see if it’s consistent with the second and third, but we’ve got 2 quarters here where we’ve seen a fairly consistent trend.
Surinder Thind: Understood. And then just a follow-up on the bill rates. You talked about a lot of renewal projects. It sounds like you’re able to hold the line on pricing here, maybe even squeeze out a little bit more. Is that the right way to think about it? What exactly is the conversation there? Is there some CPI? Is there some negotiation here? Is there a lot of pushback? How should we think about that part of the growth algorithm? So is that adding maybe a percentage point of growth at this point? How should we think about that?
Theodore Hanson: So you’re seeing very slightly — very slight increases in bill rate, but a slight increase. You’re seeing maintaining to slightly more in margin. And Rand, what would you say to the back and forth with the client?
Randolph Blazer: Well, some of our work, a good portion of the work are set bill rates that have escalators to them as you go out into the future. And then some of the escalation could be some change in the mix of the project during the course of the execution of the project, maybe adding somebody with certain expertise or dropping somebody else out. So there’s a number of factors that go into it, but it’s not really a negotiation at that point. It’s a matter of what’s the right skill set to finish the job.
Theodore Hanson: Surinder, one thing I would just add at a high level is there for in-demand IT professionals in all these critical skill areas, the client still realizes that they have to pay a market rate in order to get them. There’s not a sale going on, if you will. And so in those areas, there’s a productive understanding between us and the clients that those are to get the best capabilities there that there is a certain rate for that.
Surinder Thind: That’s helpful. And then kind of the final question here. Just revisiting Commercial consulting. Revenues were down a few percentage points quarter-over-quarter. That was a surprise to me to see that given how strong that business has been and the fact that it showed strong sequential growth last quarter. Just any color there? Is that maybe a few projects that maybe kind of ended near the same time? Or did clients just push out some work? Or is it more broad-based than that? I’m just trying to understand how to interpret that and how we should think about that on a go-forward basis?
Randolph Blazer: Ted, do you want me to start?
Theodore Hanson: Well, I’ve got commercial consulting kind of flat quarter-to-quarter, sequentially. So — and Surinder, tell me the rest of your question there.
Surinder Thind: Just the color around that. I mean I’m trying to pull up the slide deck here. When I see the commercial segment, I see Q2 at $281.1 in your slide deck in Q3 at $274.2. So I see that down 3 percentage points quarter-over-quarter for Commercial consulting.
Randolph Blazer: Correct. Slightly down. Yes. And I think it can almost best be explained by summertime, okay? Q3 has summertime and people take time off and it’s just ending elongation of projects that may be decisions that they make in the summer, just like they’re going to make in the fourth quarter around the holiday period. Ted mentioned earlier there, some companies will make a decision here in the next 3 or 4 weeks to furlough people for 5 days or 10 days, just to kind of put a pause on it, let people enjoy the holiday and get started again in January 1 or 2. So I think it’s nothing to read into it other than that.
