This is an area where the contract is pretty silent. On a practical basis I would say that the Contractor should share such information, but if they do not I do not agree that it is a disallowed cost. I see no bullet within the definition of a Disallowed Cost that makes it disallowed.. As in any case under option C and D, a cost is payable unless there is a reason within the disallowed cost clause that states that they should NOT pay it.
A Project Manager should look at disallowed costs more objectively. They need to see elements that are true disallowed costs, rather than "I don't want to pay this element now lets see what reason I can shoe-horn it into for being a disallowed cost" (not that I am saying for one second that is what you are suggesting here).