<![CDATA[Purpose: This study investigates the effectiveness of financial qualification requirements in mitigating risks associated with abnormally low bids below 80% of the owner’s estimate in government construction tenders. It assesses stakeholder perceptions of the minimum cash requirement (Ks formula) under East Java Governor Regulation No. 18 of 2023 and, unlike prior studies of low bidding in general, specifically examines how this codified cash-adequacy formula interacts with the package capability system. Method: A qualitative design using the Critical Incident Technique (CIT) was employed to collect data from eight purposively selected informants in East Java, comprising Selection Working Group, Commitment-Making Official, contractors, and regulators through in-depth interviews, document analysis, and observation. Data were coded in NVivo, categorized, and triangulated across sources to support credibility, dependability, and confirmability. Results: The Ks formula is perceived by stakeholders as effectively filtering financially unqualified contractors, consistent with pre/post-regulation bid-pattern data. However, the package capability system creates disparities for small businesses. Implications & Recommendations: The findings support harmonizing the Ks cash-adequacy formula with a proportionate Package Capability system, strengthening digital verification of contractors’ liquidity, and providing financial-planning support for small contractors. The recommendations are intended to preserve project-delivery safeguards without creating avoidable barriers to SME participation. The study identifies the absence of quantitative project-performance indicators as a limitation for future research. Contribution & Value Added: The study provides a context-specific evaluation of a codified cash-adequacy instrument and shows how its interaction with a parallel package-capability ceiling can create unintended distributional effects. It adds an empirically grounded mechanism linking procurement risk screening, administrative capacity, and inclusive public contracting.]]>
