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Sometimes I wonder how these projects are started; is it really that they go straight to “here’s a binding contract for millions”, without having them do any smaller projects in between?

If it were me, at the very least I would start with something small and say: “deliver this, let me see how it works, give me every last line of code for further inspection, then we’ll talk more”. I mean, have them build a mini-site or something and make sure that they’re competent before unleashing them on the entire payroll system, right? And you don’t need some grand familiarity with the software industry to plan that way, it just makes sense to start smaller and make sure you know who you’re really dealing with (and also spending less money if it fails).



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