Section 31.110 - Indirect cost rate certification and penalties on unallowable costs(a) Certain contracts require certification of the indirect cost rates proposed for final payment purposes. See 42.703-2 for administrative procedures regarding the certification provisions and the related contract clause prescription.(b) If unallowable costs are included in final indirect cost settlement proposals, penalties may be assessed. See 42.709 for administrative procedures regarding the penalty assessment provisions and the related contract clause prescription.60 FR 42658, Aug. 16, 1995, as amended at 62 FR 237, Jan. 2, 1997