What's the right call?

I got a flyer through Val-Pak for a handyman service...I called them and asked for an estimate (I want to make sure that no more leaves cover my storm drain and flood the basement.)

The guy comes by this AM-very punctual.

He gives me an estimate for $1700...it's about $600-$700 more than I want to spend.

One thing I've learned with contractors is that the price is never the price, so I say..."if you do it for $1000, you've got a deal."

Juan then offers to do it "without the company." In other words, he'll do it solo (he's got his own contracting business--I just called his insurance agency for proof of insurance) for that price.

Question: is this ethical?

On the one hand, is it my problem if he cuts out the middleman for a lower price to get the job?
On the other...if he shafts his business partner, will he shortchange his customer, too?

I can honestly tell the original company that the estimate I got from them was too high. That's true. Do I have an obligation/should I say that "oh, by the way, your guy went around you for a lower price?"