I'm having a little trouble finding the necessary information regarding a software upgrade. Our customer has a BCM 50, R1. Would like to upgrade to R3.
Is there an intermediate step needed? What exactly is involved in this upgrade? Any suggestions would be appreciated.

I would Suggest you to Follow the BCM50 Upgrade guide. NTP No NN40020-401_02.05_upgrd.pdf available on Nortel Website.