The Initial Operational Test and Evaluation (IOT&E) is conducted on production, or production representative articles, to determine whether systems are operationally effective and suitable for intended use by representative users to support the decision to proceed beyond Low-Rate Initial Production (LRIP).
The IOT&E will normally test the values in the Capability Production Development (CPD). The threshold and objective values from the Capability Development Document (CDD) are, therefore, superseded by the specific production values detailed in the CPD. Reduction in any Key Performance Parameters (KPP) threshold value will require a reassessment of the military utility of the reduced capability. 
Guide: DoD Test and Evaluation Management Guide – Chapter 1
When to conduct an Initial Operational Test and Evaluation (IOT&E)
The Operational Test Readiness Review (OTRR) is conducted to determine if a system can proceed into IOT&E. Once approved, an IOT&E must be completed before the Full-Rate Production Decision (FRPD). More than one IOT&E may be conducted on the system if there are system performance problems requiring retest, the system is decertified, or a need exists to test in different environments
Who conducts Initial Operational Test and Evaluation (IOT&E)
IOT&E is conducted by an Operational Test & Evaluation (OT&E) agency independent of the contractor, Program Management Office (PMO), or developing agency. Title 10 USC 2399 requires DoD to conduct an independent, IOT&E on major programs (Acquisition Category (ACAT) I & II) before entering Full-Rate Production (FRP).
Purpose of Initial Operational Test and Evaluation (IOT&E)
The purpose of IOT&E is to: 
- Estimate the Operational Effectiveness and Suitability of the system;
- Identify operational deficiencies;
- Evaluate changes in production configuration;
- Provide information for developing and refining logistics support requirements for the system and training, tactics, techniques, and doctrine;
- Provide information to refine Operations and Support (O&S) cost estimates and identify system characteristics or deficiencies that can significantly impact O&S costs;
- Determine whether the technical publications and support equipment are adequate in the operational environment.
Initial Operational Test and Evaluation (IOT&E) Certification
Before the certification of readiness for IOT&E, the developer should have obtained the Joint Interoperability Test Command’s (JITC)’s certification of interoperability for the system components. In parallel with IOT&E, Live-Fire Test and Evaluation (LFT&E) may be used to evaluate the vulnerability or lethality of a weapon system as appropriate and as required by public law. The PM’s briefing and the Beyond Low-Rate Initial Production (BLRIP) report address the risks of proceeding into Full-Rate Production (FRP). 
Each Service has different and specific processes incorporated in the certification for IOT&E documentation. The Navy conducts additional DT&E for certification called TECHEVAL (Technical Evaluation). This is a DT&E event controlled by the program office that is conducted in a more operationally realistic test environment. The Air Force has developed a guide  with a structured process using templates to assist the Program Manager (PM) in assessing the program’s readiness for IOT&E.
For the Navy, see Operational Evaluation (OPEVAL).
AcqLinks and References:
- Defense Acquisition Guidebook (DAG)
-  Test and Evaluation Management Guide – Chapter 6.3.3
-  Air Force Test & Evaluation Guidebook – Dec 2004
- DAU Test and Evaluation Management Guide – Jan 2005
- Website: Title 10 USC 2399 “Operational test and evaluation of defense acquisition programs”