you can still cover it with a plaster finish and blend.

Why is the foundation bumped out there? It looks like taking off a bit of concrete would allow drywall to cover it.

Could also add another layer of drywall.

Wondering why he couldn't plaster it and use the regular trim. I wouldn't like it either.

Tis what it is. Paint it. No one else is ever going to notice it. And it looks much better than lumpy drywall would have.

In a corner in the basement. On the floor, not even at eye level. Basements can present all kinds of challenges and, if this is the worst of it, consider yourself lucky. Not like this is in the foyer or front parlor.

If it really, really bothers you, then add another layer of drywall on that wall. Or wainscoting.

That concrete can't be ground down a bit??

Or, why not just do what's in this pic, and replace your baseboards with the 5"-6" boards? this way the hole is covered, no?

or just use a thin piece of luann or thinner gypsum, and skim coat it. once the baseboard is up, (if you use the shorter one you have) you'll barely notice it

I can't believe you have an actual contractor and he couldn't come up w/any other alternatives?? good lord.

I agree with most of what Beth said. And think that the contractor scores a minus 5 on the 'thinking outside of the box' scale. Lots of things were possible to solve this small wrinkle.

But the point is--is it worth doing anything now?

Now that everything is finished--painted, base installed, flooring laid? When in all probability that spot will be hidden with furniture?

This reno did not happen all in one day. There was time to object & remedy at minimal cost in material & labor & bad blood long before this was all but finished.