1. Is it appropriate to buy 3 years upfront using current year funds on contract?
2. Should the customer purchase each year on GPC since it would be under micro-purchase threshold, but the cost per year would be higher?
3. Should a contract be written with two option years and try to lock in the multi year rate?
The following response is based solely on the question and background information provided. As we do not have all the facts particular to your contract, program, and situation, we highly recommend, as applicable, you consult your leadership, contracting officer and/or Legal Office for guidance.
Your question could raise issues related to the proper use of funds and options. However, the overriding issue is the uniqueness of software procurement and its related services. DFARS 208.74 establishes policy for enterprise software agreements and specifically states at DFARS 208.7402 that "departments and agencies shall fulfill requirements for commercial software and related services, such as software maintenance, in accordance with the DoD Enterprise Software Initiative (ESI) (see website at http://www.esi.mil/)."
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We recommend you pursue your requirement and questions through ESI as required by DOD policy.