The Live-Fire test and Evaluation (LFT&E) Waiver is from the legal statute in 10 USC 2366 that requires “Full-Up, System-Level Testing (FUSL), realistic survivability testing”. The statute requires a LFT&E program to include FUSL testing unless a waiver is granted. A waiver package must be sent to the Congressional defense committees prior to Milestone B. This should occur at the time the Test and Evaluation Master Plan (TEMP) is approval. 
The waiver package includes certification by the Under Secretary of Defense for Acquisition, Technology and Logistics (USD AT&L) or the DoD Component Acquisition Executive that FUSL testing would be unreasonably expensive and impractical. It also includes a Director, Operational Test and Evaluation (DOT&E) approved alternative plan for conducting LFT&E in the absence of FUSL testing. Typically, the alternative plan is similar or identical to the LFT&E Strategy contained in the TEMP. This alternative plan should include LFT&E of components, subassemblies, or subsystems; and, as appropriate, additional design analyses, modeling and simulation, and combat data analyses.
The term “Realistic Survivability Testing” means, in the case of a covered system (or a covered product improvement program for a covered system), testing for vulnerability of the system in combat by firing munitions likely to be encountered in combat (or munitions with a capability similar to such munitions) at the system configured for combat, with the primary emphasis on testing vulnerability with respect to potential user casualties and taking into equal consideration the susceptibility to attack and combat performance of the system.
The DoD term “Covered System” is intended to include all Acquisition Category (ACAT) I and II systems or programs requiring LFT&E. A covered system means a system that the Director, Operational Test and Evaluation (DOT&E), acting for the Secretary of Defense (SECDEF), has designated for LFT&E oversight. These include, but are not limited to, the following categories:
- Any major system within the meaning of that term in Title 10 U.S.C. § 2302(5) that is user-occupied and designed to provide some degree of protection to its occupants in combat; or
- A conventional munitions program or missile program; or a conventional munitions program for which more than one million rounds are planned to be acquired (regardless of whether or not it is a major system); or
- A modification to a covered system that is likely to affect significantly the survivability or lethality of such a system.
The term “Major System” means a combination of elements that will function together to produce the capabilities required to fulfill a mission need. The elements may include hardware, equipment, software or any combination thereof, but excludes construction or other improvements to real property. A system shall be considered a major system if:
- the conditions of Title 10 USC 2302 are satisfied, or
- the system is designated a “major system” by the head of the agency responsible for the system.
- Submit a waiver package for any system after Milestone B which is deemed appropriate as soon as possible. It takes time to get waiver approval.
AcqLinks and References:
-  Defense Acquisition Guidebook (DAG) – Chapter 9
- Army Regulation 73-1 “Test and Evaluation Policy” – 1 Aug 2006
- Live-Fire Test and Evaluation Program
- DoD Test and Evaluation Management Guide – Dec 2012
- Inspector General Report on LFT&E for Major Defense Systems