The ongoing corruption scandal that has ensnared top officials at City Hall has led a city agency to pull a contract with a company with ties to Terence Banks, the lobbyist brother of high-ranking city officials caught up in the federal investigation.  After the city’s top fiscal watchdog rejected the proposed contract between the Administration for Children’s Services and Derive Technologies, an information technology company, ACS withdrew the contract. Derive has been a client of The Pearl Alliance, a government relations firm started by Banks that touted its ability to help companies form relationships in city government. In a letter rejecting the contract, Deputy Comptroller Charlette Hamamgian noted that ACS approved the $55,000 contract without addressing concerns about the company’s connection to Banks nor giving a fair chance for other companies to compete for the work. The application for the contract was also late. “In light of the above, ACS’s award of this contract to Derive stems from a process that includes procedural failures that undermine the principles of fairness, efficiency, economy, and competition that are designed to protect public monies and preserve confidence in the City’s procurement ecosystem,” reads Hamamgian’s letter. Banks, a former MTA worker and the younger brother of Deputy Mayor for Public Safety Phil Banks and School Chancellor David Banks had his home raided and electronics seized earlier this month. The feds are investigating whether Terence Banks was part of a scheme involving unregistered lobbying. In the wake of the raids, questions about interactions between the lobbyist, his clients and his brothers have arisen about two other clients of Banks. The News previously reported that the head of 21stCentEd — an education company with city business interests — got a private sit-down with Chancellor Banks soon after Terence Banks was hired. No one has been charged in any of the ongoing investigations nor is it clear if any administration officials are targets of the probes. The one-year contract between Derive and ACS was for maintenance and on-site support of SpectraGuard data storage hardware. Derive had a similar contract with ACS for the prior year. A spokesperson for ACS said the agency plans to re-bid for the contract and address the errors.  “As part of the contracting process we submitted a proposed award to the Comptroller,” the spokesperson said in a statement. “When procedural deficiencies were noted, we immediately withdrew the award. No award was made, and no work or payment began.” Hamamgian wrote that the agency submitted the contract to the comptroller for review after the contract’s effective date and that ACS also did not complete required paperwork showing that Derive complied with city campaign donation requirements for government vendors. Requests for comment from Derive and Kirit Desai, its CEO, were not immediately returned.  Desai previously told the New York Times that the company became Banks’ client’ several months ago but severed the relationship after Banks failed to provide for the company. Derive sells information technology support to outside companies. The company has been awarded hundreds of contracts with the city, including $99,000 in contracts by the Police Department since last year, records show. The Pearl Alliance website was scrubbed after the investigations were made public, and federal authorities have served a search warrant on at least one employee of SaferWatch, a security app company that hired Banks as a consultant, the Daily News previously reported.