Hey Humvee67,
I agree it sounds like nice work to pick up. Take Willie's advice and do some checking regarding reliability, any past problems, and the person's integrity. The rate sounds quite fair and it may be appropriate to "get your foot in the door", so to speak. These companies who find it much more economical to "farm out" their work have many contacts who also may need multiple items produced. It may take a few hours or so to familiarize yourself on your best method to achieve 10/hr, but you will and probably exceed it after you're up and running. Since he is furnishing the jig and material, all you really have to do is set up a layout to move the product from start to finish in a manner that will be efficient for you and may be more productive than the 10 per hr. he is expecting. If you can do more than 10/hr, keep it to yourself and charge him the rate he offered. Now, there's how you can up the level of your profit and everyone is happy.
Where I work, I do a very significant amount of repetitive welding for the many items we use and sell. I have designed and constructed over 60 jigs & fixtures to produce product at a profitable ratio and make my job so much easier. Do yourself a favor and really look at the jig he is furnishing and how it is designed & built. You will find that jigging is the absolute best way to maintain repetitive consistency and accuracy. You will get ideas and learn how to acquire more jobs because you can produce a quantity at a reasonable price and make a nice profit. This will really enhance your business and of course, put out quality work.
If you ever need help designing a jig, let me know. I can give you some insight as to how to charge a customer to design & construct a jig for their product. If they have to go to an engineer and then to a tool & die maker to get a jig or fixture made, it is quite costly. You will find that you can make it easier and the way you feel would work best for you.
Good luck..Denny