Two major services companies have been accused of causing “direct harm” to the Australian government and taxpayers by allegedly engaging in a price-fixing cartel for multibillion-dollar Defence contracts.

The Australian Competition and Consumer Commission (ACCC) announced on Thursday it had taken Federal Court action against Ventia and Spotless, a subsidiary of Downer. ASX-listed companies Ventia and Downer provide services such as cleaning, maintenance, transport, project management and emergency services.

Downer and Ventia hold contracts with the Department of Defence worth $4 billion and $5.8 billion respectively across more than 200 major Australian Defence Force (ADF) bases and other properties across Australia.

The ACCC claims on three occasions between 2019 and 2022, four senior executives across the two companies engaged in price fixing in an effort to control the price at which their services were offered to Defence.

“The allegations in this case relate to alleged conduct by two large, sophisticated companies providing services which are critical to the operation of Australian Defence facilities under longstanding, publicly funded Defence procurement contracts,” ACCC chair Gina Cass-Gottlieb said in a statement.

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“We allege this conduct caused direct harm to the Commonwealth and ultimately Australian taxpayers.”

Cartel conduct is where companies plan to act together – such as via price fixing – rather than compete, to increase profits for the businesses at the expense of other businesses or consumers.

One price-fixing incident alleged by the ACCC involves STIM20, a government-run program to give additional work to small and medium businesses on Defence properties during COVID.