Two major contractors face allegations of price fixing on Defence contracts.

Spotless Facility Services and Ventia Australia, contractors for the Department of Defence, are at the centre of legal action initiated by the Australian Competition and Consumer Commission (ACCC). 

The ACCC alleges the companies and four of their senior executives engaged in price-fixing arrangements that contravened competition law. 

These activities allegedly targeted estate maintenance and operations services provided to more than 200 Australian Defence Force sites.

The accusations span a period from April 2019 to August 2022. 

The ACCC claims the two companies either entered into or attempted to create agreements designed to control prices for specific Defence projects. 

It is further alleged that both companies carried out these arrangements on multiple occasions, all without the Department of Defence’s knowledge.

Spotless, a subsidiary of Downer EDI Limited, and Ventia, part of Ventia Services Group Limited, hold separate billion-dollar contracts with the Defence Department. 

These arrangements are valued at a combined $9.8 billion and are set to expire in mid-2025. 

The ACCC believes these contracts, which allow Defence to issue work orders for specific programs, were exploited in a manner detrimental to fair competition.

Senior executives from both companies are implicated in the allegations. 

According to the ACCC, some of the projects targeted included a COVID-19 economic stimulus program intended to generate work for small and medium-sized enterprises. 

“We allege this conduct caused direct harm to the Commonwealth and ultimately Australian taxpayers,” said ACCC Chair Gina Cass-Gottlieb.

This type of behaviour, if proven, violates cartel provisions under the Competition and Consumer Act 2010. 

For actions occurring before November 2022, penalties could reach up to $10 million, three times the total value of benefits obtained, or 10% of a corporation’s annual turnover if the benefit cannot be calculated. 

The ACCC is seeking civil penalties and other sanctions, including disqualification orders for three of the accused executives.

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