Under option C the only things you can disallow are costs that state specifically you can disallow. Otherwise any such cost would be shared under the option C mechanism i.e. you wont change the target price but they will eat into their own gainshare. I can understand why you may think this should be disallowed, along with the cost of correcting defects before Completion (which are also payable and hence shared). However, unless it fits a specific reason for it being disallowed then no it is not disallowable.