Legal Question in Business Law in California

Re: type of contract?

First of all, unless you have a license to practice law in your jurisdiction, don't draft contracts for people. You will want to have a subcontracting agreement that references the portions of the Statement of Work for the project that your sub will be working on. You will want to have the sub sign a nondisclosure and noncompete agreement so as to protect your co., as you said, from the sub's making an end run around your co. If the subcontract requires listings of headcount, you could use a multiplier instead of specifying a rate.

Doesn't your co. already have lawyers/a legal department? How did you guys land a contract without involving lawyers at some point? Are you an 8(a)?

Re: type of contract?

As Mr. Stone points out, such contracts should be written by attorneys who are trained and work regularly in this area. The terminology must be written with precision and expertise to avoid the resulting contract from being (a) too weak to give any real protection, or on the other hand (b), so restrictive that it violates California Business and Professions Code sections 16700 et seq. (or an equivalent Federal law or policy) by being an unlawful restraint on trade.

Re: type of contract?

A thorough one that complies not only with the needs of your two contracting companies, but with all the local, state and federal rules on international contracts and shipments, and with the Customs, DOD, Homeland Security, IRS, and other agencies' requirements. Having to ask the question tells me your company needs to hire competent experienced counsel for this project, to avoid serious legal problems later.