Headhunters want tender for new Prague DPP boss scrapped

Tender to fill top post at Prague’s public transport firm DPP appears on the wrong tracks, should be halted before doing more damage

Society|HR & Careers
István Léko | 06.02.2012
Prague mayor Bohuslav Svoboda's promise on finding a new DPP head could come back and haunt him

Prague mayor Bohuslav Svoboda (Cvic Democrats, ODS) last month on public broadcaster ČT24’s flagship current affairs program “Události” promised viewers that a standard public tender was being prepared for a headhunter who would be tasked to find a new chief of the Czech capital’s scandal-hit public transport company (DPP).

The message should have assured viewers that something was on track regarding operation of the Prague City Council’s s biggest company and that public funds would not be going down the drain. But even as the assuring words were being uttered, serious doubts were already beginning to accumulate over whether the headhunting tender would really be so standard and above board.

Information received by Czech Position suggests that the tender could just be a theatrical stunt for voters. For this reason, Svoboda should think again and consider cancelling the tender before it goes too far. Otherwise, he could face some long and embarrassing explanations to Prague citizens.

Czech newspaper front pages have in recent weeks been filled by the scandals surrounding the reign of former DPP boss Martin Dvořák, who was forced to resign last year in December.  As a stop gap measure Jaroslav Stůj was put in his place, but he too also appears to be tarnished by some suspicious deals.

DPP’s supervisory body — overhauled at the end of November following the change in the political balance of power in Prague City Hall and substitution of the Social Democrats (ČSSD) by TOP 09 as the Civic Democrats’ (ODS) coalition partner — drew up a tender around a month ago to select a human resources firm to draw up a shortlist of three or four candidates who could succeed Dvořák. Selection of the winning company was supposed to take place at the latest this week.

Business interests

The problem, though, is that a lot of money and interests are at stake in the running of DPP, and big business interests are apparently keen to have their say in the selection of the headhunting company.

According to Czech Position’s information, 14 companies were invited to put forward offers and strategies of how they could come up with a shortlist of suitable candidates. The number of companies that finally took part in the tender is not public, but there were not, apparently, that many. Three companies, known to Czech Position, wrote during the first half of January to top Prague politicians calling for them to consider cancelling the tender.

The reasons given by some of the renowned bosses of these headhunting companies and in following interviews with Czech Position were numerous. As a starting point, sounded out said representatives of DPP should first of all consider whether only companies carrying out independent searches for such candidates should be sought after and hired.

Wrong tracks

They also pointed out that it was difficult for a professional company to comply with the tender as it was drawn up because it was not possible to seek out suitable candidates to head the municipal transport company through such “standard” means. Company bosses complained that the so-called standard tender being vaunted by the city contained conditions the likes of which they had never seen during almost 20 years experience in the sector.
The three main problem points were:

  • A deadline of four weeks from the signature of an agreement “for fulfillment of the public tender”: Headhunters asked why the meaning of fulfilling the tender was not spelled out. They complained it was not clear whether this meant drawing up a shortlist of possible candidates for the top job or finally filling the vacant post. If it was just the former variant, then the tender as drawn up looked attractive. All they would be asked to do was select four likely bosses and send in the bill to DPP. Bosses of the headhunting firms confirmed that such narrowly defined contracts cropped up with regard to state or partially state-owned companies but nowhere else. In run of the mill contracts, payment is not made until the final contract with the designated top manager has been signed.
  • A clause giving the contractor the ability to alter the deadline for the tender’s fulfillment. The clause, headhunting bosses pointed out, was worthy of an “absurdistan” edict when combined with another clause setting out penalty payments of at least Kč 5,000 for every day that the deadline for completing the contract was not met. This meant that DPP could in theory change the deadline to suit certain bidders and that in reality there were no de facto limits on the sums that could be fixed as penalties for not meeting deadlines.
  • DPP was only willing to communicate to the eventual winner of the tender the key competences and tasks that had to be undertaken by the top manager of the public trams, subway and buses company. This meant that DPP was asking headhunters to take part in a tender without a snapshot of the qualities and characteristics they were supposed to be seeking, a condition that no serious headhunting company would accept.

The tender was valued at a maximum Kč  1.2 million with the price sought for the work counting for 70 percent of the eventual evaluation of bids and the strategy for choosing candidates the remaining 30 percent.

Final four

Four bidders apparently got through to the final round of the tender. According to Czech Position’s information, these include the hot favorites, Bubenik Partners and TOPSEARCH. The first company was created in 2001 by Jan Bubeník, a former leader of the student protests that resulted in the collapse of the Czechoslovak communist regime in 1989. He previously worked for the top consulting company McKinsey & Company and later for the headhunting firm Korn/Ferry International. The head of TOPSEARCH is Andrea Jarošová, who from 1998 worked for Amrop Hever Dr. Kaufmann & Partner before petting up her own company six years ago.

So far, politicians from the governing ODS and TOP 09 parties at Prague City Hall have not come out in favor of any single headhunting favorite, according to information gleaned by Czech Position. “TOP 09 is not exerting pressure for anyone — it does not have a strong opinion on the selection of a personnel agency — it is rather a question of different opinions within the ODS,” commented a source close to mayor Svoboda. The mayor, however, would apparently welcome an outcome favorable to Bubenik Partners. But another part of the ODS, said to be close to executive council member Josef Nosek, supports TOPSEARCH. Nosek did not react to questions from Czech Position.

Bubeník confirmed his took part in the tender. Jarošová did not want to make any specific comments.

How the strangely formulated tender for the DPP boss, who draws a salary of Kč 160,000 a month plus up to 90 percent extra in bonuses, continues and whether the process gets to the last stop or sours relations between TOP 09 and ODS, or within the ODS itself, to such a degree that it  comes off the rails, has yet to be seen. 

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