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The GRM drivers made side-by-side contact at the start of the second lap of today's morning race, which sent both Caruso's Alfa and O'Keeffe's Renault into a spin.
O'Keeffe was able to get going again and finish 11th, while Caruso went on to hit the wall and was out of the race on the spot.
GRM is now in a race against time to get the Valvoline-backed Alfa ready for this afternoon's final race.
Explaining the clash post-race, both drivers offered differing views on who was at fault.
"Dylan tagged the back corner and that sent me up into the fence pretty hard," explained Caruso.
"The guys are trying to get it fixed for the next race, hopefully we can get out there. It's quite a bit of damage, it's basically everything from the rear doors back. We'll see how we go, it's a lot of work."
O'Keeffe says he expected Caruso to give him room in the braking area for the first corner after getting a run up the front straight.
"It's a shame for the team, you never want to see that happen. But at the end of the day we're racing and it will happen with seven cars on the grid from the same team," said the 2019 TCR Australia runner-up.
"We were coming out of the second last turn and I had a good run on him. For someone of Michael's experience I thought we would have have held around the outside, then I would have been the inside for the first turn.
"I felt like he saw me, and as soon as we got into the braking zone he just turn across in front of me.
"We both spun and unfortunately Michael's car sustained severe damage. It's very unfortunate and I feel for the Valvoline Alfa guys."
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