David Sasnett: No. The accounting doesn’t work that way, unless we have missed our cost estimate, the margin should be pretty steady going forward. And we’re a lot more comfortable with the cost – just now than we were during the first six months of construction. When we proposed this project, it was a very scary kind of environment. I mean there was a very tight labor market in the Arizona area and raw material prices will go going through the roof. So the initial margins were lower, because of the uncertainty in the anticipated additional cost. The people at PERC have done a fantastic job both in efficiency – construction efficiency, addressing the labor storage issues that most of the other construction companies are having out there in Arizona, and they’ve done a good job of controlling cost So they – obviously, again, they’ve done a great job on the servo project today [indiscernible].
Gerry Sweeney: Got it. Super helpful. That’s it from me. I’ll jump back in line. So thanks guys. Congrats on a great quarter.
Frederick McTaggart: Thanks Gerry.
Operator: [Operator Instructions] Our next question will come from John Bair with Ascend Wealth Advisors. Please go ahead.
John Bair: Thank you. And good morning.
Frederick McTaggart: Good morning, John.
John Bair: Congratulations on a great quarter and really a very solid momentum that you have. I wanted to ask about the opportunities that you might see with having won the water treatment contract on the military base. If there’s other opportunities like that, in the country that you might be able to address or pick up?
Frederick McTaggart: Yes, I think there are. I mean, I think we probably haven’t mentioned it too much in the calls and stuff. I mean we’ve been operating the Camp Pendleton wastewater system for the Marine Corps for several years now. We added the Edwards Air Force Base contract this summer. Those types of contracts go out to be pretty regularly. So, we anticipate continuing to pursue those types of agreements.
John Bair: And those extensions on the annual basis, does those go out for an annual bid – in other words, is it competitive, or that you have to continue to offer a bid against others for them to decide to extend the contract or not?
Frederick McTaggart: Well, it’s at the client’s discretion to extend, but those prices are already included in the bid that we put in for the initial one-year term. So you bid out to five years basically in your bid submission. So it’s really up to the client to decide what they want to do the following year. But typically, we’ve – our experience has been that they renew them through the life of the contract.
David Sasnett: Yes. We’ve had very good experience there, John. I mean it’s guaranteed though the history….
John Bair: And that falls on that you have experience with a couple of them that do you sort of become a preferred operator for other facilities. That’s kind of where I was driving it. The opportunities throughout the U.S. base – U.S. base?
David Sasnett: We have panels in Edwards Air Force Base gives us a lot of credibility. And that counts for a lot when you’re bidding on new contracts so are we. Yes, the moment beat us up John, hopefully we’ll continue.
John Bair: Yes, right. And then turning to the Hawaii contract. In your release that you’re moving on in the first phase. So at what point do you start receiving revenue on that project? And I guess it’s going to be like some of these other ones where it’s – as you move forward, that’s when you receive revenues against the overall contract win.
Frederick McTaggart: Yes. I mean this is sort of more in David’s [valley], but we’re booking the revenues for that project based on costs that we incur to-date. What do you call that?
