What should I know before hiring an excavation contractor?

Make sure they are licensed and bonded.   You might want to read up on excavating so you have an idea of what is involved.    Make sure he calls the appropriate people to get power, sewer, water, phone and cable lines marked out so he does not dig one up.   You most likely will need a building permit if you are putting in a pool or something.   He should handle that.    Lastly,   it is OK to pay 25% to 50% up front but do not pay more than 75% until the job is done to your satisfaction.  If you said ten feet deep,  measure it.   If it is only nine and a half,   make him finish.    Once you make the final payment you got about zero chance of his fixing it.  

Make sure they are licensed and bonded. 

Check his contractors license with your state contractors board, and make sure that he is licensed and bonded.