Russ,
Although you are needing to comply with ISO 9002:1994 at this time, it might be worth looking ahead at the requirements from ISO 9001:2000. Regarding outsourced processes, clause 4.1 says:
Where an organization chooses to outsource any process that affects product conformity with requirements, the organization shall ensure control over such processes. Control of such outsourced processes shall be identified within the quality management system.
Regarding ISO 9002:1994 I would start with looking at 4.2.3 Quality Planning. The first sentence states:
The supplier shall define and document how the requirements for quality will be met.
I think this is the place to describe the controls your organization has over outsourced processes to ensure that requirements for quality are met. Then I would look at 4.6.1 & 4.6.2. They really mirror in more detail what ISO 9001:2000 says in clause 4.1.
I'll leave the part about traceability to someone else to address. In my past experience, traceability was not a requirement for our product, but I did require traceability by lot to inspection records. I did this mainly to comply with the requirements for Inspection and Testing in section 4.10.
I would encourage you to look at certifying your subcontractor to provide documented evidence of inspection and conformity so that you don't have the burden of re-inspecting unnecessarily. Once you're confident that you have a certified supplier, your job of ensuring that the requirements for quality are met can be reduced to supplier audits, and if necessary inspection of random samples.
I hope this helps.
Best Regards,
Hank