Companies mostly implement their strategies through projects and use different procedures of selecting projects into project portfolio, but development of an optimized project portfolio and its systematic management are almost entirely absent. In order to meet planned objectives, the organization has to choose the projects, that will be consistent with the chosen strategies and their strategic objectives and which will collectively bring maximum benefits. Because the area of project selection and project portfolio management is relatively unexplored and less frequent in practice, the focal point of the thesis is to explore the concept of project portfolio, its development and management. We will primarily focus on the development phase of the project portfolio, which will centre around the optimization of the project selection considering the limited resources available in the organization. With the evolution and an increased understanding of the concept of project portfolio, its design and management we can contribute to a better practice, more efficient achievements of strategic objectives, greater competitiveness and better business performances of enterprises. Dynamics of operations and the business environment demand that companies perform more and more projects to achieve the strategic and business objectives. In this thesis a conceptual model of the project portfolio development for the selected contracting authority will be made, which will be based on the AHP method. Furthermore, we will also investigate how the selection of projects into a project portfolio influences the overall benefits of the company.