All around the world, governments are eagerly looking toward a digital future, but their view is obstructed by the challenges they face in the modernizing such vast enterprises. This study concentrates on a Government-to-Business (G2B) relationship in which the development and implementation processes of a government-based e-procurement system are explored. This study does not represent the overall picture of building an e-government, but it helps to bring out a number of issues which are currently challenging many e-government projects and can have further implications for other projects around the world. Finally, based on the findings, we learned that implementing e-procurement system within the context of e-government is rather complex and different from a normal B2B relationship. Specifically, three issues were identified from this study: continuous technical challenge, user preferences and institutional arrangements.