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It's not uncommon for people to quote low then try and make up profit from materials. I.e. charge you full price but pay a trade discount. Not the most transparent way of doing things and if you're not comfortable with it it's for the best that it didn't go ahead before any money changed hands.
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Not sure if this has been covered but next builder you get in, offer to provide the materials and they just provide the labour.
That way you can have a full itemised account of all the spending.
It's hard to say whether or not it would save you money though...
Sumo
Soul
@Chalfie
In a way, I feel like we've dodged a bullet here.