In short, data are corrected for bias, interorder background, sky background, sky emission lines and cosmic ray hits. They are flattened, optimally extracted and finally merged. Find here a detailed record of the reduction steps. The UVES pipeline assumes a Gaussian profile for the cross-dispersion flux distribution. All Service Mode spectra reduced by QC Garching are flattened in order-bin space, i.e. with extracted flats.
Flat extraction is done with the weight factors derived from the science spectrum.
However, telluric lines in the flats are found to propagate much stronger into the extracted science spectrum in the case of pixel-space flattening. Since telluric lines in the flats fill the whole slit, they are effectively removed by the optimum extraction. Flattening corrects for the blaze function within the orders. Users interested in flux calibrated spectra have to apply this additional step using the response curves derived from standard star spectra. Raw standard star measurements, if available, are delivered in the 'calib' directories of the Service Mode package.