Your basement's excavation will create a hole approximately three feet larger than the foundation on all sides. This is so the protective water shield and the sump pump drainage pipes and escape windows can be installed without the risk of cave in.
Once those items are installed, an inspection will be performed by the building department. Upon their approval of the work stone, clay and dirt will be used to backfill the 36" void. This picture shows what the edge of the foundation looks like after the backfill. Note that the dirt is against the foundation without a gap, making it safe for the structural steel installers and framers to start their work on your new home.