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To make the e-government procurement process totally secure, protecting critical information at database level is absolutely vital along with ensuring secure data transaction over the network. With the assumption that network security in data transaction is ensured, this paper focuses on how to store, process and retrieve data so that critical information remains secured and cannot be viewed by anyone including procuring entities, vendors and even the database administrator. Here, the concept of encryption is put into practice to ensure that the total database management process is secure and fair. Compression is also used together with encryption to keep the volume of encrypted data manageable. A theoretical as well as an implementation oriented treatment to the use of encryption and compression has been presented in this paper with a view to providing security and space-efficiency for the e-government procurement system.