Hey Harmonica -
If your guy has no track record (no demo reel, no references, little practical experience) then don't pay him; he has nothing to offer except - hopefully - a burning desire to gain experience doing audio post work. There are plenty of audio post folks like myself out there with varying degrees of experience and corresponding rates, so look around; maybe an ad in Mandy and a few other places. Not to mention that the audio post houses have all trimmed staff, and there are lots of very experienced people with smaller "personal" studios who will work for a lot less than you would expect. This means that people like me had to reduce our rates as well in order to compete and stay in business. So do some more searching; you can get some very nice work for "reasonable" rates. You could even PM me for a quote.
A substantial part of my audio post work is done via FedEx and the 'net with people I have never met. My contracts very explicitly detail fees, due dates, terms of payment, etc. It's all based upon the budget of the client, and my job is to cram as much into the budget as I can. I have a pretty good idea of how long each aspect of the post process will take me to do, so I base my bid upon the linear minute length of the film. I generally get two payments - 50% down and 50% before the mix goes out the door. They get two (2) "tweaks" to the mix. After that they pay my hourly rate or we negotiate new terms.
Another option I have done is 25% down, and I'll do the dialog and/or production sound edit and very, very basic ambient backgrounds so I can get a handle on noise reduction & de-verbing issues; a rough mix then goes to the client for approval. The next 25% is paid and I will do the Foley, send out another rough mix with the DX for approval. The third 25% is paid and I do the sound effects work and the mix. I get paid the final 25% before the full mix goes to the client. They get two (2) "tweaks" to the mix. After that they pay my hourly rate or we negotiate new terms.
And there have been many variations on those two themes.
You should do your homework as well. When looking for bids have the linear minute length of the film, and an honest appraisal of the quality of the production sound. Let the potential audio editors/mixers know how much (again, linear minute length) action (weapons play, fights, etc.) and even "simple" things like vehicles and "crowd" scenes there are in the project as they take more time to sound design. Once the potential sound editor/mixer/designer has that information s/he can give you a realistic bid.