This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.

We believe you are correct to document the actions you are taking.  If the contracting officer was incrementally funding a firmed fixed-price contract, that was likely incorrect and, without knowing if there are other circumstances, potentially anti-deficient.

Your legal advice was also correct.  We use a J&A to support doing other than full and open competition.  But you need to have a determination and findings in the record, particularly given the circumstance you are amending.