Should we say something to management about this guy actually not being that great?
That depends on your role.
If you are a contractor brought in to work on specific projects, then you put your head down, get your own work done, and ignore the company politics and the abilities of the people around you. That's what you were hired to do.
On the other hand, if you were brought in to assess the company/department and make a recommendation (usually written), then you must include your assessment of the skills of the people. Sometimes that includes assessing individuals, but often you are being asked for an overall recommendation regarding how to make things better.
In your case, you have indicated that you are being "paid for work, not to evaluate others", so I think your path is clear.
As @s1lv3r states, sometimes that's the difference between a "contractor" and a "consultant".
Basically, if you aren't being asked for your opinion, tread carefully. At least in my part of the world (the US software field), contractors who badmouth employees can ruin their reputation quickly.
And if you still choose to convey your opinion regarding the lack of skill of one employee, you had better make sure that your own work is entirely perfect. This employee and his friends may very well want to retaliate and point out your imperfections.