Software development projects in government institutions have certain characteristics that can negatively impact the management process of these projects. However, the negative impact of these characteristics can be decreased by using the appropriate software development project lifecycle model, because it ensures more comprehensive and effective project management. The methodology for selecting the most appropriate model for software development projects in government institutions, where outsourcing is used, is elaborated. The impact of the characteristics of software development projects in government institutions on project execution and management process is analysed. The methodology is elaborated taking into account these characteristics and ensures that the appropriate model is selected.