2022 budget cap violations

[hollus]

Maybe you’d like to tell me how you see it instead of just dismissing my point outright as unrealistic, especially since RB have done exactly what my scenario depicts. They gained significantly and haven’t (to date) been punished. We can disagree but please try and be respectful.

You are arguing in bad faith, hence the response. Here's how I see it:

a, The primary punishment was a WT reduction, not a fine like you suggest. b, RB didn't know what the specific punishment was going to be, hence could not reason in the way you suggest. c, You've presumed RB intentionally broke the cap, we don't know this. d, You've presumed they gained significantly from the breach, we don't know this. e, There is no formula for x amount of money = x amount of lap time, like your scenario suggests. f, You've stated there was no punishment, which is just factually incorrect and can only be interpreted as bad faith. If you'd said "I think the punishment was inadequate", we could have a discussion.

All in all I don't think your scenario provides much value for a serious discussion about the CC.

There’s nothing bad faith about it.

A) They were fined $7m (which doesn’t come out of the budget cap) and had a future reduction in wind tunnel time. Future penalty, not one relating to their overspend, such as a points deduction for example or an in-season penalty. I’ll concede that there was a penalty and therefore my point was factually incorrect but I suspect you know that I was referring to penalising their overspend directly vs one that would/could/may/may not impact them markedly going forward. But you knew that, right?
B) You’re absolutely right about the cost vs lap time discussion but you don’t spend the money in anticipation of going slower do you? (Even Mercedes aren’t doing that, despite the results suggesting otherwise )
C) The punishment was a future punishment (with the exception of the small fine), not one that has had a material impact on them until now if the spin is to be believed that they have to now work on the 2024 car as a result of the penalty.
D) Even the penalty was reduced to 10 % of their post success allotted wind tunnel time, not 10% and then their “success ballast” allocation of wind tunnel time (10% of 70 is not the same as 10% of 100 minus the 30%).
E) RB had every opportunity to test the budget cap assumptions and chose not to. Whether they did this willingly or deceptively we’ll never know, but they had exactly the same opportunities as every other team. Who all managed to stay under the cap.

Oh, and if you don’t think any of the above is the basis for a discussion then feel free to ignore it rather than dismissing it as “bad faith” when it’s anything but.

All fine points, tiny73, and thank you for detailing them well, but none of those says (or does bot say either) that a break much be considered a binary thing, with either a harsh punishment or no punishment. That is the point not being explained.
I don’t think a separation between breach and punishment makes sense, BTW.

[Just_a_fan]

That's not really a logical way to think about it because it presumes that if a team knew of their procedural error which lead to the re-classification of expenses, that they would not have changed course in other areas to avert a breach. I.E that they could have gone to more extreme lengths like cancelling some other discretionary activity of the F1 team.

We saw Mercedes decline a tyre test because the rebuild costs of Bottas-Russell accident were so high that they risked breaching the cap limit by attending the test.

We'll probably see such things happen again in future with various teams.

The fact that a team breaches suggests they either knew - in which case they're chancing their arm and got caught, or they're incompetent with regards to cost management - either by virtue of not knowing what they're spending/miscalculated a figure, or by virtue of not knowing what they have to include in the controlled items cost list.

Your reference of the Mercedes tire test is exactly the point.

Also, there is a third option. A team believes that their own reading is trivially and unambiguously correct, only to find out 7-8 months later that the FIA had another interpretation. This happens often under the technical regulations.

But the team that believed they knew best were the one team that didn't make use of the dry run offered by the FIA. All the others did and were compliant with the cost cap figure. Hubris bites, it seems.

[AR3-GP]

We saw Mercedes decline a tyre test because the rebuild costs of Bottas-Russell accident were so high that they risked breaching the cap limit by attending the test.

We'll probably see such things happen again in future with various teams.

The fact that a team breaches suggests they either knew - in which case they're chancing their arm and got caught, or they're incompetent with regards to cost management - either by virtue of not knowing what they're spending/miscalculated a figure, or by virtue of not knowing what they have to include in the controlled items cost list.

Your reference of the Mercedes tire test is exactly the point.

Also, there is a third option. A team believes that their own reading is trivially and unambiguously correct, only to find out 7-8 months later that the FIA had another interpretation. This happens often under the technical regulations.

But the team that believed they knew best were the one team that didn't make use of the dry run offered by the FIA. All the others did and were compliant with the cost cap figure. Hubris bites, it seems.

We don't know the details of the dry run submissions and who got an F on it. Aston Martin did have a procedural breach. It only so happened that when the expenses were reclassified, that they were still under the cap. This shows that it was not just RB who took a different interpretation and believed it was "obvious" that this is what was meant, only for the FIA to go "not like that....". Once again, we see this all the time in the technical regulations.

Also, the hubris argument doesn't make sense. We don't know that RB did not seek clarification on ANYTHING. It just turns out that an area which the FIA did not agree with, was an area that they did not seek clarification on. They could have sought clarification on numerous other items and fixed those classifications and adjusted course within the season, without any of us knowing about it. It's extremely unlikely that RB had zero contact with the FIA's financial team in 2 years.

[chrisc90]

Does a overspend on say catering automatically mean that there was more money to spend on something else?

How are are the FIA looking into the accounts? If they are looking into them in any significant detail, it would be very easy to see that a team spend £x on catering and £x on development. It would be pretty easy to see that the money has moved through departments, especially since there will be a paper trail.

Maybe all these finance officers in other teams are knocking out some CFD designs and then 10minutes before their break deciding that it’s going to cost £xx to produce.
Wonder if the FIA will go through a team of finance auditors and their backgrounds where that team is bigger than the actual team designing the parts. Almost becomes a little bit suspect for a relatively small team/operation.

Audit your own work… removed from the cost cap.

[Just_a_fan]

Does a overspend on say catering automatically mean that there was more money to spend on something else?

How are are the FIA looking into the accounts? If they are looking into them in any significant detail, it would be very easy to see that a team spend £x on catering and £x on development. It would be pretty easy to see that the money has moved through departments, especially since there will be a paper trail.

Maybe all these finance officers in other teams are knocking out some CFD designs and then 10minutes before their break deciding that it’s going to cost £xx to produce.
Wonder if the FIA will go through a team of finance auditors and their backgrounds where that team is bigger than the actual team designing the parts. Almost becomes a little bit suspect for a relatively small team/operation.

Audit your own work… removed from the cost cap.

If you spend on catering thinking it is outside control only to find it is inside, then, yes, you've had more money to spend on the car.

As for finance officers doing CFD stuff, it's possible. A tad unlikely and, of course, they'd all have to be very well trained in CFD. Finding CFD-expert accountants is probably harder than just doing the cap correctly, frankly. Plus, where are they doing the CFD work? ON their office computers? That won't be worthwhile. So using the "mainframe"? That's going to show in logs fairly easily and will eat in to the allowed CFD hours on that system.

As the finance section, as HR, legal, etc., fall outside the cap, there's no issue with a team having 100 accountants if they can afford them. Indeed, it would be a sensible thing to spend excess budget on.

[AR3-GP]

If an accountant could do CFD, then all billing hours and CFD time for that simulation would come from the team's budget cap and CFD allocation. There's no loophole. The exclusions are not about what their nametag says. It's about what they actually do on the job. If the cleaners are doing the CFD, you still have to bank that work against the caps. It's very unlikely you will be able to get anyone on a cleaner's salary to do CFD for you, mind...

[Aesop]

Does a overspend on say catering automatically mean that there was more money to spend on something else?

Not per se. As i understood it catering costs for both F1 and nonF1 staff were included because RB could not specify which catering costs were F1 related. If nonF1 costs could be deducted, maybe they'd stay within the cap.

[Just_a_fan]

If an accountant could do CFD, then all billing hours and CFD time for that simulation would come from the team's budget cap and CFD allocation. There's no loophole. The exclusions are not about what their nametag says. It's about what they actually do on the job. If the cleaners are doing the CFD, you still have to bank that work against the caps. It's very unlikely you will be able to get anyone on a cleaner's salary to do CFD for you, mind...

Exactly. The whole "accountants doing CFD" thing was an attempt to suggest Mercedes are cheating. I'm amazed people are suggesting it.

[Tiny73]

All fine points, tiny73, and thank you for detailing them well, but none of those says (or does bot say either) that a break much be considered a binary thing, with either a harsh punishment or no punishment. That is the point not being explained.
I don’t think a separation between breach and punishment makes sense, BTW.

You’re right and that’s my point, it should be binary to be effective otherwise you have a risk/reward scenario, especially since the FIA have now set a (dangerous IMHO) precedent of insignificant penalties for teams in “minor breach”.

[Cs98]

All fine points, tiny73, and thank you for detailing them well, but none of those says (or does bot say either) that a break much be considered a binary thing, with either a harsh punishment or no punishment. That is the point not being explained.
I don’t think a separation between breach and punishment makes sense, BTW.

You’re right and that’s my point, it should be binary to be effective otherwise you have a risk/reward scenario, especially since the FIA have now set a (dangerous IMHO) precedent of insignificant penalties for teams in “minor breach”.

So you've determined the penalty has been insignificant, but you know the breach was significant? As in you know the penalty has not had a significant effect but you know the breach definitely has had a significant effect on RB's current performance. How can you know this?

And using your explanation here. How do you think a $5000 breach should be punished? Specifically.

[Tiny73]

All fine points, tiny73, and thank you for detailing them well, but none of those says (or does bot say either) that a break much be considered a binary thing, with either a harsh punishment or no punishment. That is the point not being explained.
I don’t think a separation between breach and punishment makes sense, BTW.

You’re right and that’s my point, it should be binary to be effective otherwise you have a risk/reward scenario, especially since the FIA have now set a (dangerous IMHO) precedent of insignificant penalties for teams in “minor breach”.

So you've determined the penalty has been insignificant, but you know the breach was significant? As in you know the penalty has not had a significant effect but you know the breach definitely has had a significant effect on RB's current performance. How can you know this?

And using your explanation here. How do you think a $5000 breach should be punished? Specifically.

A breach is a breach. There should be no minor or major distinction otherwise it’s only “a bit of a non-compliance” isn’t it? But only a little one so that’s ok, right? I’m not claiming any inside knowledge but if you think the spend didn’t have an effect (positive or negative) then why overspend at all? Why not do what 9/10 teams did and comply with the cost cap?

Conversely if you want to argue that the penalty has been significant then what impact has it had on RB to date? Specifically.

[Stu]

So like you said, any costs spared are just manufacturing/material costs. Not that much compared to the whole picture.

We hear of front wings being 6-figure sum parts. That's quite a lot to lose if your drivers wipe 3 or 4 off in a few races. When the teams are thought to only have a few million each year to develop the car, losing half a million or more on a few front wings is going to hurt development.

The ‘Goblin Wing’ from last year is an example of this, it was displayed outside the garage, but never run on the car in a timed session; parts cost £0, but WT/CFD runs & R&D costs count.
At the same time, one floor was created from two broken floors in Austria, saving the parts cost of a spare floor, repair costs will be low (materials only for the fix) as labour is already covered (the lads & lasses in the garage have already been paid).
imo, AMR shot themselves in the foot with their Hungary-spec rear wing last year.

This year (so not in 2022 budget), the latest RedBull sidepod has reduced costs as the internal changes (ducting, etc) are covered as PU cooling (not included in budget), with only the external pod panel changes coming within the cap.

[Cs98]

So you don't want to tell us what you think this catch all binary penalty should be?

I’m not claiming any inside knowledge but if you think the spend didn’t have an effect (positive or negative) then why overspend at all?

The question is presuming they overspent on purpose. Again not leaving any room for the possibility a team could overspend by mistake. Bad faith.

Conversely if you want to argue that the penalty has been significant then what impact has it had on RB to date?

I think they've brought significantly fewer updates than most teams, and having a lot less WT time will be playing a role in that. Updates usually yield time on track. Scary to think where they could have been with their full allocation.

A breach is a breach.

A crime is a crime. Doesn't mean we punish all criminals equally. Not even those who technically commit the same crime.

[Stu]

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Conversely if you want to argue that the penalty has been significant then what impact has it had on RB to date? Specifically.

Without a crystal ball it is impossible to determine the severity of outcome at the point of issuing the penalty (unless that penalty is DSQ from WCC).
I think that most teams would argue that a 10% reduction in any measured metric (WT/CFD or Budget Allowance) could not be considered insignificant and would have some effect on performance.

[Cs98]

Without a crystal ball it is impossible to determine the severity of outcome at the point of issuing the penalty (unless that penalty is DSQ from WCC).
I think that most teams would argue that a 10% reduction in any measured metric (WT/CFD or Budget Allowance) could not be considered insignificant and would have some effect on performance.

Well they would argue it's insignificant when they are lobbying for a more severe penalty for another team, as is their job. But if someone tried to take away 10% of their CFD and WT allocation they would scream to high heaven