The most likely reason that the option to form an alliance is not shown is that the faction concerned is at war with another faction that you are allied to.

You cannot by definition be allied to both sides in a war.

Check you diplomatic report to find out if the faction you are interested in is at war with anyone and if they are check to see if you are already allied to their enemy.

If you are you will need to cancel your alliance with their enemy before you can ally with them.