Among critical stakeholders of software projects developed in public institutions are software developers and project managers affiliated to sub-contractor companies, who are working onsite at the public institutions. The aim of this study is to determine the effect of working on site in public software projects for software developers and managers with respect to selected factors. The research is designed as an exploratory and qualitative study. The study participants are 10 software developers, one technical team leader and four project managers. Semi-structured interview technique was employed as the data collection method and “content analysis” was applied on the obtained participant responses. Following this analysis, “key content” approach was used to identify the issues to be further considered. It has been determined that the productivity of software developers working onsite at public institutions is low due to intense requests, shortened time to fulfill these requests, and long duration of authorization processes. Moreover, a finding of the study is that the quality of the developed projects and the motivation of the developers are considered to be low for the same aforementioned reasons. Among the foremost causes for these results are the fact that employees work under two different hierarchical structures one in the public institution and one in the software company, more than one managers assign work and there is an authority confussion between organizational units and people in the public institutions.