Good contracts include descriptions of prep work and repairs; paint specs by brand name, type, color and product number; the number of coats; and a full description of the work, including frequently omitted items such as cabinet interiors and shutters. Minimize delays by specifying that, weather permitting, work will be continuous. Get a payment schedule that minimizes the down payment — the more payment you can withhold until the end, the more leverage you'll have to get the job done well and per your specifications. Insist that contractors provide proof that they carry both general liability and workers' compensation coverage.
Oh, where to begin? Let me start with 'watered down paint'. 25-50% before the material gets to the site? Impossible. You would basically be painting with water at that point. It would be less of a hassle, and cost, to simply use proper material. You would be forced to apply three coats instead of two, as the coverage would be horrible. Whatever cost you think might be saved in materials would be lost in labor.

House Painter