I know I would have to complete a D&F if the whole requirement would be LH or T/M but since only a small portion will be LH is the D&F still required?
FAR 8.404 requires the Contracting Officer to follow these procedures when using Federal Supply Schedules (Pay special attention to the paragraphs highlighted below):
(h) Type-of-order preference for services.
(1) The ordering activity shall specify the order type (i.e., firm-fixed price, time-and-materials, or labor-hour) for the services offered on the schedule priced at hourly rates.
(2) Agencies shall use fixed-price orders for the acquisition of commercial services to the maximum extent practicable.
(3)
(i) A time-and-materials or labor-hour order may be used for the acquisition of commercial services only when it is not possible at the time of placing the order to estimate accurately the extent or duration of the work or to anticipate costs with any reasonable degree of confidence.
(ii) Prior to the issuance of a time-and-materials or labor-hour order, the contracting officer shall-
(A) Execute a determination and findings (D&F) for the order, in accordance with paragraph (h)(3)(iii) of this section that a fixed-price order is not suitable;
(B) Include a ceiling price in the order that the contractor exceeds at its own risk; and
(C) When the total performance period, including options, is more than three years, the D&F prepared in accordance with this paragraph shall be signed by the contracting officer and approved by the head of the contracting activity prior to the execution of the base period.
(iii) The D&F required by paragraph (h)(3)(ii)(A) of this section shall contain sufficient facts and rationale to justify that a fixed-price order is not suitable. At a minimum, the D&F shall-
(A) Include a description of the market research conducted (see 8.404(c) and 10.002(e));
(B) Establish that it is not possible at the time of placing the order to accurately estimate the extent or duration of the work or anticipate costs with any reasonable degree of confidence;
(C) Establish that the current requirement has been structured to maximize the use of fixed-price orders (e.g., by limiting the value or length of the time-and-materials/labor-hour order; or, establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements; and
(D) Describe actions to maximize the use of fixed-price orders on future acquisitions for the same requirements.
FAR 16.601(d) requires the Contracting Officer to comply with the following limitations for a time-and-materials contract or order:
(1) The contracting officer prepares a determination and findings that no other contract type is suitable. The determination and finding shall be-
(i) Signed by the contracting officer prior to the execution of the base period or any option periods of the contracts; and
(ii) Approved by the head of the contracting activity prior to the execution of the base period when the base period plus any option periods exceeds three years
And DFARS 216.601 requires the Contracting Officer to comply with additional limitations with respect to Time-and-materials contracts:
(d) Limitations.
(i)(A) Approval of determination and findings for time-and-materials or labor-hour contracts.
(1) Base period plus any option periods is three years or less.
(i) For contracts (including indefinite-delivery contracts) and orders in which the portion of the requirement performed on a time-and-materials or labor-hour basis exceeds $1 million, the approval authority for the determination and findings shall be the senior contracting official within the contracting activity. This authority may not be delegated.
(ii) For contracts (including indefinite-delivery contracts) and orders in which the portion of the requirement performed on a time-and-materials or labor-hour basis is less than or equal to $1 million, the determination and findings shall be approved one level above the contracting officer.
(2) Base period plus any option periods exceeds three years. The authority of the head of the contracting activity to approve the determination and findings may not be delegated.
Bottom line: Unfortunately, based on the background information provided in your question and from my interpretation of the FAR/DFARS, it does appear that a D&F will be required for the “portion of the order” that is time and materials or labor hour. The key wording here is the “portion of the order” from FAR 8.404(h)(1)(iii). There it states the following: “at a minimum, the D&F shall establish that the current requirement has been structured to maximize the use of fixed-price orders (e.g., by limiting the value or length of the time-and-materials/labor-hour order; or, by establishing fixed prices for portions of the requirement) on future acquisitions for the same or similar requirements.” There is similar wording in DFARS 216.601(d) which indicates a D&F is required for the “portion of the requirement that is on a T&M or Labor hour basis….” Therefore, I interpret this to mean that the D&F is required not only at the contract level but also at the CLIN level for those CLINS that are on a T&M basis.
Also, keep in mind the limitations in FAR 16.601(d) and DFARS 216.601(d) requiring the HCA to approve the D&F since the anticipated performance period for your requirement (including options) is five years.
Once again, this answer is based on my interpretation of the FAR/DFARS and based on the limited information provided in the question. For those reasons, I strongly recommend discussing the D&F requirement with your Contracting Officer, legal and perhaps the GSA Contracting Officer administering the multiple award schedule (MAS) you plan to place the order against.