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What is A Direct Contractors Contract?

 The Direct Contractors Contract (DCC) edition 1 (May 2020) is a new contract in the JBCC suite of agreements designed to regulate the direct appointment of a Direct Contractor by the Employer for specialized work, fittings and installations. The Employer may use the DCC to appoint the Direct Contractor directly who will be then be a Direct Contractor. The DCC requires that the Employer administers the contractual relationship with the Direct Contractor as the agreement does not provide for a Principal Agent. In light of this the DCC is short and fairly simple, being set out in only 10 clauses. In this article we will examine the obligation of the parties to the agreement and have a look at how the DCC regulates the relationship between the Employer, Direct Contractor and a Main Contractor, should one be appointed.

The Direct Contractor and the Main Contractor

 Although the contractual relationships is  between the Direct Contractor and the Employer, being the parties to the agreement, and not between the Direct Contractor and the Main Contractor, should a Main Contractor be appointed by the Employer for the project, the Direct Contractor is obliged to work in coordination with and have consideration for the Main Contractor’s programme in relation to the works. In terms of clause 3.4 of the DCC, the Direct Contractor shall, coordinate the execution of the direct contract works with the main contractor’s construction programme. In turn the Main Contractor shall allow the Direct Contractor to use the necessary equipment where attendance has been agreed with the Employer and accommodate the Direct Contractor on the project.

The Main Contractor is not entitled, in terms of the JBCC Principal Building Agreement (PBA), to refuse the Direct Contractor access to site even if the Main Contractor was not informed of the Direct Contractor(s) appointment(s) when the PBA was concluded. The Main Contractor is however entitled to claim for a revision to the date for practical completion in terms of the PBA, with an adjustment of the contract value, should a delay be caused by the act or omission of a Direct Contractor.

The main Contractor is not responsible for monitoring the progress or quality of the direct contractor works. That being said the Main Contractor must be cognizant of the direct contract works and make allowance for the direct contract works in its construction programme, provide access to the works and allow for the use of the plant and equipment as said above.

In terms of clause 2.4 of the DCC agreement the Main Contractor shall be responsible for insurances in terms of COIDA and insurance of vehicles, tools, plant and equipment of the Direct Contractor which is not meant to be built into the direct contract works. Should the Employer not have employed a Main Contractor, the Direct Contractor will be responsible for the abovementioned insurance(s). The insurances effected by the Employer or the Main Contractor to cover the risk of damage and destruction to the works in terms of the PBA, includes the direct contractor’s works.

The Contractual Relationship Between the Employer and the Direct Contractor  

 As stated above, the Employer administers the contractual relationship with the Direct Contractor as the agreement does not provide for a Principal Agent.   The Employer must prepare the agreement for signature, issue the contract documents and provide all construction information to the Direct Contractor directly. The Employer’s obligations include issuing contract instructions directly to the Direct Contractor, monitoring progress and quality of the direct contract works, assessing extension of time claims and certifying completion.

Contract Instructions

 The Employer issues contract instructions directly to the Direct Contractor in accordance with clause 6 of the DCC agreement. The contract instruction must be written to be of force and effect and as with the PBA and Nominated selected subcontract agreement (NSSA), a verbal contract instruction will be of no force and effect.  Should the contract instruction change the direct contract works or should it include an instruction for additional work, the Employer and Direct Contractor must agree in writing as to the costs and time implications of the said changes.

The Direct Contractor has a continuous obligation in term of clause 3.2.2 of the DCC to monitor the quality of the direct contract works and in terms of clause 3.4 to co-ordinate the execution of the direct contract works with the execution of the works in terms of the Main Contractor’s programme or other Direct Contractors. The Employer is also obliged to regularly monitor the progress and quality of the direct contractor works so that the Employer can at appropriate intervals issue contract instructions to the Direct Contractor on the standard and/or quality of the works.


 The DCC only provides for one payment arrangement, namely payment of the quotation amount in two lump sums. Should an alternative payment arrangement be agreed between the parties, for example interim payments by the Employer, then the payment clause must be amended. In terms of clause 3.1.2 the Employer shall make payment of a deposit upon signature of the DCC agreement, in the amount specified in the contract data by the Direct Contractor, if so required. The balance of the quotation amount shall be paid by the Employer within 7 calendar days of completion of the Direct Contract works.

Extention of Time Claims (EOT)

The Direct Contractor is entitled to a revision of the date for completion of the direct contract works, without any adjustment to the quotation amount, due to either weather or force majeure, and, with an adjustment of the quotation amount, for a delay caused by a contract instruction issued by the Employer not occasioned by the Direct Contractor’ s default, making good physical loss and repairing of damage to the direct contract works, not cause by the direct contractor,  and any other circumstances that are beyond the control of the Direct Contractor.

The DCC does contain a time bar should the Direct Contractor not notify the Employer of its intention to claim for an EOT and submit its claim within 10 business days after the extent of the delay can be determined. Therefore, should the Direct Contractor fail to submit its EOT claim within the time period specified, the Direct Contractor’s claim will be forfeited. On receipt of the claim, the Employer in consultation with the Main Contractor, must assess wither or not the Direct Contractor is entitled to an EOT with or without a n adjustment to the quotation amount. Should the Direct Contractor be unhappy with the Employer decision, the Direct Contractor may declare a dispute in terms of clause 10 of the agreement.


 The Employer shall inspect the works within 5 business days from receipt of notice by the Direct Contractor that the direct contactors works can be regarded as complete and issue a list of defects / outstanding work to be attended to by the Direct Contractor. Once the defects have been remedied and the Employer has inspected the works and is satisfied that al the defects have been remedied, the Employer shall accept the direct contract works as complete. The Direct Contractor shall then handover all applicable statutory / regulatory approval certificates and user manuals to the Employer, clean the work areas and remove all its construction equipment from site. Upon Completion the Direct Contractor will provide the Employer with a product installation guarantee and where required against defects in the Direct Contract works.


Although JBCC designed this agreement to be fairly simple to administer, the Direct Contractor who is appointed as a Direct Contractor must have a good understanding of its duties in terms of the agreement and the obligations of the Employer in order to ensure that the agreement is properly administered. The Direct Contractor has a duty of care in the execution of the direct contract works and shall execute workmanship to industry accepted quality standards.  If appointed in terms of the DCC, Direct Contractor must be mindful of the time bar in relation to EOT claims and of its responsibility to ensure that the execution of the direct contract works is coordinated with the main contractors programme to ensure timeous completion of the direct contract works.