"very small jobs, but a lot of them"
This scenario, to me, seems good for business, assuming the they are the kind of small jobs that you're set up for and happy to turn around quickly. But lots of jobs with lots of clients presents a mixed bag in my mind as each client necessitates its own pre-qualification. I feel more secure with 200 jobs from 20 clients to 'turn the nut' annually, than with 20 jobs from 2 clients , or far worse, 2 jobs from 2 clients ...aaaaack!
"paying for the leads whether you get the bid or not", yup, no bueno. But, I'd suppose you'd be happy to pay substantially more than $20 if you got the job, so, there is some value there, and, after all, you were on their website first. But here's the thing I've found, it's not so much the getting job that is valuable as is getting the client. Getting the job, is just a step toward getting the client. But, then, once you have the client, why do you need the marketer? And this, of course, is their fear.
"Supposedly", yuck, very no bueno, "each lead is passed on to only one or two other engineers in your area"
"but how could you verify that other than asking the prospective clients?"
Yup, I sense lots of distrust here on both sides, certainly understandably and importantly on your side, but also on their side. Sounds likes they are selling an internet algorithm which they realize you could blow through with some effort; and, I'm sorry, although I really liked Ex Machina (like really really), I wouldn't trust her with my marketing,
yet.