You're definitely not being gouged although you can probably find someone to do the work for less. I'd think this bid would be in the middle of the road although I'm unsure how involved the duct mods are. It may be a very inexpensive bid. Prices vary wildly within each market place let alone different geographic locations. Without seeing the job, I am guessing that you could probably get a bid that would be up to $1000 less than the one received. This isn't necessarily a good thing and you shouldn't assume that you won't have to pay these costs at some point due - lower quality of installation i.e. more repairs/callbacks, decreased efficiency (poor duct mods), delay of the cheap guy in responding when you do have a problem, etc. If you like the contractor and are comfortable with them, you should pay them and have them do the work.