First, why are you assuming he can't hire home grown consultants?
I don't assume anything - I just reflect on his statement: " Geography is not a problem as we are used to working in a distributed manner." . He doesn't say which country his company is in, but if it's in the US or Europe, then coders from India is definitely cheaper.
Second, you can usually get the same consultants back for maintenance work. And if you can't because they are busy, there are other consultants, often with the same firm.
Agree, but that's not what he's asking for.
Hiring lots of permanent employees is not the only way to go.
I agree. But again - he explicitely asks for a self contained agile team and not a group of consultants from a large company. IF he want to go for consultants, I'd advice him to use a company and not assemble one on the fly. Alternatively, hire his own group of programmers. My point is, that assembling a team on your own is very risky. Use a firm or hire.
Great spirits have always encountered violent opposition from mediocre minds. -- Albert Einstein