Authorized Unpriced Work (AUW)

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Authorized Unpriced Work (AUW)

Authorized Unpriced Work (AUW) is the effort for which definitized contract costs have not yet been negotiated, but for which the contractor has received written authorization from the Procuring Authority to proceed with the work.
The contractor and/or the customer will typically reach an understanding of the need to change the technical scope of the current contract.  This may be caused by a change in design, a desire to enhance technical performance not previously understood, new information gained from a key test performed, or other needs driven by the customer or identified by the contractor.  Once both parties acknowledge a change, a proposal is developed and submitted to the customer.  This proposal contains a not-to-exceed (NTE) value that provides the basis for the contractor and the customer to proceed until the change proposal is negotiated and the final cost determined.  The NTE value should be placed in Undistributed Budget (UB) until formal distribution to the Control Account Managers (CAMs).
The contractor will follow its Earned Value Management System (EVMS) Description and associated procedures in logging the budget in the Program Logs, followed by authorizing the budget / Statement of Work (SOW), and proceeding with the work.  Typically, a portion of the budget associated with the AUW is authorized to the Control Account Managers (CAMs) from UB with specific guidance contained in the respective work authorization documents.  There is not a fixed percentage required by the EIA-748, often contractors will budget up to the NTE AUW value until an increase to the NTE is authorized by the Procuring Authority and/or negotiations are complete.  At that time, the full-negotiated value is provided to the CAMs unless the Program Manager decides to retain a percentage for Management Reserve (MR). 

Once the customer formally authorizes the contractor to proceed, the contractor authorizes budgets and begins work; this should be accomplished within two accounting periods depending on the magnitude of the change. Following negotiations the balance of the Undistributed Budget should also be distributed not to exceed two accounting periods.

The AUW is reported in the Contract Performance Report (CPR) or the Integrated Program Management Report (IPMR).