A review of the unit awards program was carried out in 1965 in order to expand the capacity of the Meritorious Unit Commendation to include acts of valor, at a request from the Commander, USMACV. This study found that there was indeed a gap in the awards program as The Distinguished Unit Citation was awarded for gallantry in action for heroism that would warrant the Distinguished Service Cross to an individual and there was no lesser unit award for heroism. A recommendation was given to expand the capacity of the Unit Commendation to include acts of heroism. This recommendation of the review was not approved by the DCSPER, but rather a memorandum was sent to the CSA on 7 January 1966 to suggest a Army Valorous Unit Award to be adopted to show unit gallantry in combat equivalent to that required for award of a Silver Star to an individual. The Chief of Staff approved this recommendation on 12 January 1966.
All members of the unit cited for the award are approved to wear the emblem of the Army Valorous Unit Award. The emblem is thought of as an individual decoration for those in connection with the cited acts and is approved to be worn if they continue as members of the unit or not. Other personnel serving with the unit are approved to wear the emblem to show that the unit is a recipient of the Army Valorous Unit Award.
Army awards and decorations are approved accordance to the guidance contained in Army Regulation 600-8-22. Rules for the proper wear of Army awards and decorations can be found in Army Regulation 670-1. The policy for display of unit awards on guidons and flags and supply of streamers is found in AR 840-10.