Several friends in the engineering business have recently asked me about this one after another, so I will briefly discuss it today.
In the engineering industry, borrowing qualifications is very common. When one's own company does not have a sufficient qualification grade, it finds a qualified company to bid in its name; after winning the bid, it pays a management fee, and the project is still carried out by the company itself. In the industry, this is called affiliation (guakao).
Many people have done this for more than a decade and have always regarded it as a customary practice, and only after hearing that peers were taken away by the police for "bid rigging" did they begin to lose sleep.
I. Borrowing qualifications to bid is not in itself the crime of bid rigging
Let me put the conclusion first: merely borrowing qualifications to bid is an administrative violation, not necessarily a crime.
The crime of bid rigging under Article 223 of the Criminal Law governs "collusion": where bidders collude with one another on bid prices and harm the interests of the bid inviter or other bidders, and the circumstances are serious, they are sentenced to fixed-term imprisonment of not more than three years or criminal detention, and are also or only fined; where bidders collude with the bid inviter in bidding and harm the lawful interests of the State, the collective or citizens, they are punished in accordance with the provisions of the preceding paragraph.
The trigger of this crime is the word "collusion," not "the qualification was borrowed."
Borrowing qualifications to bid violates Article 54 of the Bidding Law and Article 26 of the Construction Law: bidding in the name of another person renders the winning bid invalid and exposes the violator to administrative liability including fines, disqualification from bidding and even revocation of the business license. Article 42 of the Implementing Regulations of the Bidding Law further clarifies that obtaining another person's qualification certificate by transfer, lease or other means for the purpose of bidding constitutes "bidding in the name of another person."
Case No. 1674 in the Supreme People's Court's Criminal Trial Reference (a case of fraudulently obtaining export tax rebates arising from affiliated foreign trade operations) sets out this boundary clearly: affiliated operations are an evasion of the administrative licensing system and are first and foremost an administrative violation; however, an administrative violation does not necessarily constitute a crime, and criminal liability must be premised on express provisions of the Criminal Law; administrative illegality cannot be directly equated with criminal punishability.
Therefore, the four words "borrowed the qualification" will not by themselves send a business owner into criminal proceedings. What truly determines guilt or innocence is whether collusive conduct is concealed behind the qualification.
II. The four steps of crossing the line
In practice, no business owner steps into the crime of bid rigging in a single move. From "borrowing qualifications" to "bid rigging," there is a superposition of four steps, and each additional step brings one closer to criminal case filing.
The first step: from borrowing one company's qualifications to borrowing those of a group of companies.
Borrowing one company's qualifications to bid on one's own project, with the bid price set by oneself, still falls within the scope of administrative illegality. Once a bidder begins borrowing the qualifications of multiple companies to participate simultaneously in the same tender, the nature begins to change: multiple companies appear on the list of bidders, and competition becomes a prearranged performance.
At this stage, however, the legal assessment of guilt versus non-guilt has not yet truly taken shape.
The second step: from each company quoting its own price to a unified bid price.
This is the most critical step. After borrowing the qualifications of multiple companies, the bid prices in several tender documents are set by the same person, the tender documents are prepared by the same group of people, and the bid security is paid from the same account. This step is the core of what the investigating authorities determine.
A case announced by the Dunhua Court in Jilin in 2025 is a standard example: Zhou attached himself to one company to bid on a school maintenance and renovation project, and also had his employees borrow the qualifications of five other companies to engage in bid rigging. All bid prices were designated by him, and all costs were paid by him. He ultimately won the bid at more than RMB 9.59 million and made a profit of RMB 200,000. The court ultimately convicted him of the crime of bid collusion, sentenced him to six months' imprisonment and a fine of RMB 10,000, and confiscated all illegal gains.
The step in which he attached himself to a company was merely administrative illegality; the step in which he unified the bid prices was a crime.
Another case heard by the Qinbei District Court in Guangxi took this approach to its extreme: because Su lacked qualifications himself, he approached a leader of a construction company to discuss "cooperation." He paid RMB 1.85 million in bid-accompaniment fees, and the other party arranged for eight construction companies to accompany him in bid rigging. The winning bid amount reached RMB 397 million. Su was ultimately sentenced as the principal offender to one year and three months' imprisonment and a fine of RMB 500,000.
The third step: bringing the tendering party and the evaluation committee members into the scheme.
Collusion among bidders is already sufficient for a crime; when combined with collusion from within the tendering party, this is the situation assessed under Article 223, paragraph 2 of the Criminal Law, and it usually also brings to light bribery and the acceptance of bribes.
The case of Tang, pronounced by the Gong'an County Court in Hubei in August 2025, is a complete example: Tang borrowed the qualifications of six companies to engage in bid rigging for a high-standard farmland project. His accomplices then contacted, through the then director, a tender specialist at a tendering agency, and the specialist asked the bid evaluation experts to show favor. Afterward, RMB 13,000 in gratitude money was passed to the evaluators through the specialist. The project was won with a bid of more than RMB 4.38 million. Tang was sentenced to five months' criminal detention, suspended for eight months, and the tender specialist Liu, who was also drawn into the scheme, was sentenced to four months' criminal detention, suspended for six months.
The qualifications were borrowed, the bid prices were arranged, and the evaluators had been approached in advance. With all three elements present, no one can escape liability.
Fourth, if something goes wrong with the qualifications you borrowed, the lender will be drawn in as well.
Many large, qualified companies take the view that they merely collect a management fee and that what happens after the bid is won has nothing to do with them. That view becomes a problem in one situation: where they know the other party is borrowing qualifications in order to engage in bid rigging or collusive bidding, yet still provide the qualifications and cooperate in affixing seals.
Conversely, there are also precedents on the side of non-conviction:
In a case heard by the Zhuozhou Court in Hebei, the defendant entity, after providing its qualifications, collected a fixed contracting fee under the contracting agreement and did not take any commission from the project payments,and the court found that it did not possess the criminal intent to collude in bidding, so the charge alleged could not be establishedIn Xintai, Shandong, six construction companies were coerced into lending their qualifications to accompany bids and obtained no benefit whatsoever, and the procuratorial authority found the circumstances minor and decided not to prosecute.
The same act of lending qualifications, with or without intent to collude, places the parties in two entirely different worlds.
Beyond whether the line is crossed, there is also a monetary threshold.
Article 68 of the Supreme People's Procuratorate and Ministry of Public Security Provisions on the Standards for Filing and Prosecuting Cases (II) provides that where collusive bidding causes direct economic losses of more than RMB 500,000, illegal gains of more than RMB 200,000, or involves a winning bid project amount of more than RMB 4 million, the case shall be filed and prosecuted; where illegal means such as threats, deception or bribery are used, the amount is not considered; and where a party has been subjected to administrative penalties two or more times within two years for collusive bidding and commits the act again, the amount is likewise not considered.
For bosses who borrow multiple sets of qualifications to rig bids, the RMB 4 million winning bid threshold is not high; a medium-sized project is enough to reach it.
III. Cases do not come to light only through reports; there are also big data, administrative-criminal linkage and corruption cases
Many bosses assume that collusive bidding cases come to light only when someone reports them, but in fact there are more entry points than one might imagine, and there are more and more of them.
Bid evaluation systems and big data: Today's electronic bid evaluation systems automatically cross-check bid documents: identical machine codes used to produce the bid documents, quotations arranged in regular tiered patterns, and identical errors will all be flagged. In the typical collusive bidding cases jointly released by the Supreme People's Court and the National Development and Reform Commission in May 2025, some defendants specifically used "tiered quotation placement" to evade big data monitoring, and were still uncovered. With the upgrading of technical means, the path of "leveling the bids" to pass review is no longer viable.
The channel between administrative and criminal enforcement is widening: Between administrative penalties and criminal case filing, there used to be a gray zone, which is now being filled in by institutional rules. In April 2025, 17 departments in Shandong, including the Provincial Development and Reform Commission and the Provincial Public Security Department, jointly issued dedicated measures specifying 28 circumstances under which matters must be referred to public security authorities; as of September 2026, 372 leads had been referred. This means that matters that in the past could be closed with a fine may now proceed directly into criminal proceedings.
Emerging from corruption cases: Bid rigging rarely exists on its own; it is almost always tied to bribery and corruption. In Shishou, Hubei, a person surnamed Ren, seeking to win a bid for an elementary school maintenance and renovation project, first borrowed the qualifications of 16 companies, then paid a high price to buy out the qualifications of the remaining 29 bidding companies, thereby holding all 45 bidders in his own hands. He also, over many years, paid bribes totaling 930,000 yuan to ten state functionaries. Ultimately, he was convicted of both the crime of bid rigging and the crime of bribery, with the punishments combined; because he voluntarily disclosed leads on the bribery, cooperated with the investigation, and pleaded guilty and accepted punishment, he was ultimately sentenced to one year and ten months.
When investigating authorities trace backward from those who accepted bribes, bidders can rarely stay uninvolved. The scale is larger than imagined, and liability will reach individuals. Since 2023, the two levels of courts in Jingzhou, Hubei, have filed 68 collusive bidding cases involving 150 people.
One more reminder: entities can also commit this crime, and dual punishment applies: the entity is fined, and the directly responsible persons in charge and other directly responsible personnel are still sentenced.
IV. After involvement in a case, what must be contested is: the agreement, the subject, and the amount
If a self-check reveals that you have indeed crossed the line, or if you have already been asked to cooperate with an investigation, there are several things you need to know. At this point, the investigation actually focuses on four things: which companies are acting as a group, who set the quotations, whether bid-accompaniment fees were paid, and how profits were distributed after winning the bid.
The room for defense lies here as well: whether the quotations were independently formed by each party, whether there was an agreement to collude, and whether the evidence holds together.
One of the most easily confused points must be distinguished here: whether you borrowed another company's qualifications or the qualifications of companies you yourself controlled is not the same thing for purposes of legal characterization. If the several companies participating in the tender are in fact all controlled by you alone, and there is no genuine competitive relationship among the companies, some views and judicial precedents hold that in such a situation there is no subject basis for 'collusion' and that it is essentially merely 'a quotation by one bidder', so the crime of collusive bidding is not constituted; some scholars also argue that this crime is a necessary joint crime, premised on the participation of two or more subjects, and that where there is only one genuine bidder, collusion cannot arise.
In practice, procuratorial organs in several localities have indeed made non-prosecution decisions in cases of bid rigging without collusive quotation, on the ground that it does not satisfy the constitutive element of 'collusive bidding quotation'; however, this is only a space for defense, not a safe zone, and in recent years most judgments still adopt a strict position:
so long as among the persons participating in the tender there is a company not controlled by you (even if the other party was brought in merely to accompany the bid), or other genuine bidders suffer loss as a result, that is sufficient to establish the crime; the Dunhua case and the Qinzhou case mentioned above both have this structure, and this point of dispute is precisely the place most worth contesting, and hardest to contest, in individual cases of this kind.
There is one further point to distinguish:Article 40 of the Implementing Regulations for the Bidding Law of the People's Republic of China provides that six situations, such as 'the bid documents are prepared by the same entity or individual', 'the bid quotations show regular differences' and 'the bid security is transferred out of the same account', are 'deemed' to be collusive bidding; that is a presumption in administrative supervision, not criminal knowledge, and joint criminal intent cannot be inferred merely from the technical features of the bid documents.
How to argue on the amount: how the illegal gains are calculated, how the direct economic losses caused to the tenderer are determined, and whether multiple projects can be aggregated all directly affect whether the filing threshold is met.
Sentencing itself is not heavy; the statutory maximum penalty for this crime is only three years, and in practice a large number of cases receive a suspended sentence, with some accessories also sentenced to a fine alone. The real risk lies in the cumulative effect: once bribery, acceptance of bribes or forgery of company seals is discovered, the penalties for several crimes are combined, and the situation is entirely different; the Supreme People's Court has made clear in its answers on the Legal Answers Network that there is no implicated relationship in criminal law between collusive bidding and bribery or acceptance of bribes, and that they should be evaluated separately and the penalties for several crimes combined.
If, after the case comes to light, efforts result in the best outcome of non-prosecution, you must understand that this does not mean the matter is over: after the procuratorial organ makes a non-prosecution decision, it will still, in accordance with regulations, transfer the case to the competent administrative department, and administrative penalties such as fines, confiscation of illegal gains and disqualification from bidding will still follow.
Lawyer's Observations
Borrowing only one qualification, quoting independently and competing on your own strength falls within the scope of administrative illegality; borrowing a batch of qualifications, quoting uniformly and having someone coordinate among them is what the crime of collusive bidding looks like. If two of these three are present, you should stop and consult a professional lawyer.
Keeping a written agreement for the borrowing of qualifications, a fixed management fee with no profit sharing, quotations determined independently by yourself and bid documents prepared by yourself—these records seem unremarkable in ordinary times, but once problems arise upstream and the investigation traces back, they are the key materials proving that there was 'no collusive intent'.
Companies that hold qualifications and charge management fees for lending them out must likewise take note: review what the borrower intends to do with the qualifications, refuse any cooperation in connection with bidding schemes, and never take a share of the project profits; if they lend the qualifications while knowing that the other party is engaged in bid rigging or collusive bidding, they may in the future find themselves standing in the dock alongside them.
