I feel like the work being on a volunteer basis (or perhaps in exchange for a kind of sponsorship where we prominently display their logos on our website or at launch events) should be our ideal, to keep costs down, but we should be open to paying if it really is necessary. I am sure places like Armadillo would be willing to offer us some kind of discount.
I think brmj's point about licensability is crucial, though. Whether we pay them or not, it should be always be the case that any copyrightable or patentable material that comes out of the contract should be made available to the general public under permissive licenses. If we can't find anybody willing to work under that condition then we'll just have to suck it up and do it ourselves.
Although, thinking about it again, maybe that won't be an issue. We are talking about contracting out manufacturing work, right? In that case there are no IP related issues – we would give them the plans that we want constructed, so we would already own the copyright on those plans and could ensure they were free. Or were we talking about contracting out design work? In that case IP issues are a very real concern, but I kind of feel like maybe we shouldn't be doing that, since it goes against the collaborative spirit of the project. What do people think?