This is a difficult situation.
What did the vendor actually claim to have supplied and is the claim in writing? Was it stated that certain parts were to be new, as opposed to simply suitable?
Is there a receipt for the engine?
My suspicion is that the builder has not had the crank re-ground, not fitted new pistons, has used an old oil pump and has not measured correctly or done a 'dummy build' to be sure everything is correct - for example, used 'Plastigauge' to check bearing clearances.
But then, maybe the price reflected the quality of the workmanship - you get nothing for nothing!
It does seem a bit 'iffy' and it may be that there will be no help from the vendor. Or the vendor may cover the complete cost of doing it correctly. It could end up in the small claims court as a worst case.