Controlling Inherent Conflicts of Interest
It is economically efficient to engage the local consultant as the one who is presumably the person most familiar with the technical issues peculiar to this plant, since they they had worked there for "many years." It is fine for them to subsequently be employed as an engineering consultant to the company owning that plant, PROVIDED THAT (1) they no longer have any major financial ties with the company, such as a pension, and (2) they adhere to ALL engineers' ethical responsibility to hold the safety and welfare of the public paramount in their decisions.
It may be correctly noted that this engineer might have personal relationships with personnel still employed by their former company that would bias their professional recommendations. But bias based on personal relationships is inherent in human nature, and therefore is potentially a factor in any consulting engineering agreement.
The keys to controlling it in the public interest are (1) full disclosure of such relationships and (2) the personal integrity of engineers. And the integrity of engineers can best be insured by the threat of legal action by clients, "whistle-blowing" by associates, and publicity by news media when engineers grossly violate explicit provisions of ethical codes.