Sorry for being so very slow in responding. I left right after my last post and only just now returned for a lurk, and saw your query.

You pose an interesting question that is seemingly simple to answer, but gets a little complicated.

First, your memory serves, as I was manager of Contracts Compliance and Support, which to a degree oversaw and facilitated the actions of Contracts Administration (very close). This was for incoming contracts, not for outgoing contracts - outgoing contracts go through the Procurement/Subcontracts organization. However, due to the nature of my job and my inquisitive manner, I do KNOW how they handled such things (also partially because earlier in my career I was a Logistics Specialist at a different prime contractor, and part of Logistics' responsibility is the Procurement/Subcontracts function). Also, I obtained consultant services from time to time to support my organization's efforts.

Now, for an answer that I'll try to keep as simple as possible (not because I don't think you'd understand, but for brevity - you know my tendencies! LOL). For those reading this that don't know what LL and I are addressing (since it isn't discernible from the linked LL post without reading the entire thread), this has to do with PDSG engaging the services of Baroni LLC for a strategic assessment - and LL's detective work suggests the LLC may not be "real" from a legal perspective (I hope that conveys okay, LL).

This is a bit of an odd-ball situation, in that the subcontract wouldn't really be a subcontract, because it isn't "sub" to a higher tier contract. It would be an outgoing contract. And the contract would not be for product or services to be delivered to anyone outside the company - it would be for internal consumption only. See how it gets a little complicated?

When our company contracted for consultant services, it all depended on the nature of the consulting desired. An architect would be "sourced" from the facilities organization, a feel-good moral consultant would be sourced out of HR, etc. This "strategic assessment" effort, IMO, would have been sourced from either Finance (if you believe it has to do something in the financial audit world, which may have merit since PDSG says it's sourced by the Audit Committee), or from Marketing (if you believe as do I that it has more to do with developing methods to ultimately sell product).

In either case, the source organization would likely be the ones identifying the desired consultant/consulting firm due to their expertise in the field.

If it was a formal consulting firm, the source organization would work with Procurement/Subcontracts to develop a contract identifying what specifically is expected of the firm as a work product (a report or whatever) and other terms and conditions, then gain appropriate approvals and, upon gaining approvals (both sides), issue the contract with the cost of the effort charged to the appropriate GLA under the source organization.

If it was a single specific person desired to perform the consulting, the source organization would go through HR for the "hire", and HR would demand the consultant contract with us through a temp service provider (e.g., Select, Manpower), thereby simplifying all the complexities of payroll taxes, health and any other benefits, etc. The work effort/product and other terms and conditions, as well as the desired person, would be specified in the order, and after getting appropriate internal approvals the contract would be issued to the temp service provider (who would then negotiate with the person, though the payment amount would likely have been pretty much nailed down through pre-negotiation between the company and the person).

In this case, which is it? A formal (maybe) consulting firm consisting (presumably) of one solitary person. But here's (finally!) what's probably the thrust of the answers which I believe you seek:

In either case the Terms and Conditions (T&Cs) would be tuned to the type of work to actually be performed. An at least minimal background check (as for any hire) would be performed by Security. In this case, since the firm/LLC is a new entity with no real history to examine, the focus would be on the person - after all, that's who you're hiring (and if the firm consisted of more than one person, all those to be directly involved in the effort would receive a background check before being allowed in company facilities or visibility of any company data/operations). They would be drug tested. If the person(s) required visibility of company private/proprietary information (financial, trade secrets, bid rates, customers, etc.) in order to perform the effort, the T&Cs would stipulate execution of a standard NDA by all involved consultant personnel. If classified information were involved, Security would verify the personnel had proper clearance, and company personnel would be advised and reminded of the additional requirement of "need to know" - restricting consultant personnel just as would be done with company personnel.

In this case, it's probably just the one person involved (Baroni). IMO, my former employers would not really care about the status of the LLC - it's the person they're hiring, and that would be the focus of all attention. If that person requests payment to an entity other than himself by name, it wouldn't really matter. Cashing the check is their problem, not the company's.

Now, if the consultant/firm were involved in producing product deliverable to a customer (e.g., the USG), there would probably be some issues if the consulting firm didn't legally exist. Probably not insurmountable issues, however.

Amazingly, I KNOW of an instance where this actually happened and, more amazingly, it was my company! I last worked for a corporate entity, a wholly-owned subsidiary of a larger corporate entity. That entity sold its defense business, including us, to another large corporate entity. Until I volunteered for layoff, some six months after the "transition", we continued to bill the USG using the now-defunct corporate name. Every couple of weeks, I'd get a call from the local (District) USG Administrative Contracting Officer asking "what are you guys calling yourselves now?" (since we no longer legally existed as a corporate entity). The ACO was willing to cooperatively work with us (me) to process the proper paper to the payment office to alleviate any concerns, and get a new FSCM (Federal Supply Code of Manufacturer) if necessary. I'd call the company President/CEO and ask if a decision had been made by on-high, and reply to the ACO. When I left, like I say, some six months after our change in corporate status, a decision still hadn't been made. This was actually one of the many reasons I volunteered for layoff (who wants to work for a company that was this poorly focused on something THAT significant? Especially when everyone, including the USG which had to approved the M&A, knew the buyout had happened many months prior to the "transition" date). During that time, we kept billing, and the USG kept paying (over $100M tot).

So much for keeping it brief! LOL My reputation is sustained!

SGE