[Eric 951]

His proposal should be in lump-sum form as you mention. No contractor would ever agree to providing materials at cost only without some mark-up.

Some things you should get in writing--a schedule for work completion.
A well-defined scope of work--which should include who is responsible for what--removal of materials, clean-up, electrical, protection of existing items etc.
A payment shcedule which you both agree upon--not give me 50% up-front. Depending upon the length of the project, you could do a monthly progress payment based upon percentage of work completed. Or, you could also agree to hold 10% of payment from all invoices--this is retainage--retainage is paid as a lump sum at the completion of the project(owners' final acceptance).
You should also discuss punch list items and how they are resolved. This would be any errors or deficiencies upon completion of the work.
Make sure they are properly licensed for whatever type of contracting they are doing--especially plumbing and electrical.
Find out his warranty--I don't know the scope of the project--but a warranty against inherent defects in material or workmanship on larger projects can be up to 12 months.
Ask to see a copy of his insurance certificate--check his coverage amounts for general liability and workers comp.

Just remember the more specific you are up-front--with drawings, blueprints, sketches, specific dimensions, sqaure footage, etc. the less ambiguity exposure you face.

Just saw you live in ohio--he should have a seperate workers comp cert since Ohio is monopolistic.