I think the estimate is a little high for what is being done. Most shops will allow you to buy and bring your own parts, but if they give you an estimate like this they have downgraded the labor cost making it appear that you are getting a deal because I always believed that parts are parts and what they pay is or should be cheaper for them to buy. But lets face it, its how they make money by jacking the prices up on parts. What I would do is go buy all the parts, best quality and warranty you can find, it will still be cheaper that what the shop is charging you and take them to the shop and pay them for JUST the labor they quoted you for. They will probably try and say well you will not get any warranty, warranty for what? You should already have manufact. warrantty on parts, keep all reciepts and dates. Worst case senario you do have a malfunctioned part, you will have to pay for labor out of pocket on that but I believe it would still be cheaper than paying the shops price for parts in the long run. Also this may come to a surprise to you, I believe I have somewhat of mechanical hands and I changed my water pump on my lincoln 5.0 same as mustang engine water pump when it was about 10yrs old, same age as your vehicle and it was somewhat difficult due to the fact that the bolts were corroded/rusted in the engine block and you had to keep them soaked with gunk spray forever to get them to turn an inch. I got frustrated and broke 2 of the blots in the engine block. Didn't know how to tap and die new threads so took the cross your fingers and pray out and put extra cement and tightend bolts back into the engine and pump and it worked perfect. no problems, Its in my opinion that you maybe get another estimate on labor and try to work out a deal with a reputible shop that warranties there work and bring your own parts. I recommend carquest parts. I got my alternator there for 140.00. advance/autozone/napa wanted 260.00 for the same.
BTW,
Had my truck towed to Tuffys auto, wanted 354.00 for ingnition cylinder for an old ford p/u I had. the part was 20.00 at autozone, tuffys charged me 125 and 200 for labor. Walked across the street to goodyear. 20.00 for the part. 62.00 for labor= 85.00 w/ tax. I have always had good experience with goodyear. they have good upper level management and it shows.