The Dervishes failed to make it four wins out of four after committing many defensive errors that eventually helped Contractors claim their first win of the season.
Buoyed by their 4-2 Champions League victory over Ahli despite their elimination from Africa's premier club competition, Ismaili were expected to face little resistance from Contractors.
However, the Mountain Wolves secured a surprise but thoroughly deserved victory via two first-half goals from striker Ehab Al-Masri and Palestinian midfielder Mohamed Samara.
Ismaili scored a late consolation through a free-kick from in-form winger Ahmed Samir Farag.
"We can only blame ourselves," Dutch coach Wotte, who was heavily criticized after Ismaili finished third in Group B of the Champions League, told reporters after the game.
"I spoke to the players before the match and warned them against getting carried away with the victory over Ahli.
"This was the mentality of Ismaili players today, they lost concentration after the big win."
Despite their first league defeat, Ismaili are still in a good position in the 16-team league table.
They lie sixth on nine points, two behind leaders Masri who played two games more.
"Our loss today was not a problem, several big clubs dropped points such as Ahli and Zamalek but I'm disappointed with our display," Wotte added.