The government, as part of its effort to cut costs, will halt purchases of cars equipped with air bags for the 1986 and 1987 model years, according to government and auto industry officials.

The General Services Administration, the government's main purchasing agent, has decided not to renew a contract with Ford Motor Co. to provide fleets equipped with air bags. Ford is the only domestic company producing cars with air bags.

General Motors Corp. plans to offer air bags in its 1988 models. Chrysler Corp., which has been lobbying vigorously with GSA to void the Ford contract, will begin installing a different passive-restraint system -- possibly seat belts that close automatically -- in some more expensive cars in the 1989 model year.

Chrysler, in a series of letters to GSA, has accused the agency of discriminating against other manufacturers than Ford by asking for domestic cars with equipment that, at the moment, can be provided only by Ford.

GSA had proposed purchasing only cars equipped with passive restraints, beginning with 1987 models. The agency annually buys about 50,000 cars and 50,000 other vehicles from domestic manufacturers, according to government and auto industry officials.

"Should GSA elect to proceed with the proposed plan to purchase all passenger cars with passive restraints beginning with 1987 models, Chrysler Corp., one of the three major manufacturers, will be removed from bidding until model year 1990," F. R. Henderson, Chrysler's director of government vehicle sales, said in a letter to the GSA in January.

"Translated into the most conservative figures, this means GSA would prohibit Chrysler from bidding on approximately 100,000 vehicles," Henderson wrote.

Ford, as part of a safety demonstration project involving the GSA and the National Highway Traffic Safety Administration, last year sold approximately 5,300 compact, air-bag-equipped Tempo cars to the federal government for about $36.5 million.

Air bags normally add about $815 to the price of a Tempo, but under the demonstration, Ford deducted all but $15 of that, according to Ford and other industry sources.

Neither Ford nor GSA officials would say what Ford was asking for its 1986- and 1987-model cars with air bags. But some industry and government sources speculated that Ford was asking for the full price on its air bags plus what amounts to a dealer's invoice price -- usually the lowest car price -- of $6,772 per Tempo.

At $7,587, that would make the government Tempos the lowest-priced air-bag-equipped cars on sale in the United States. West German luxury car manufacturers BMW and Mercedes-Benz also sell models with air bags in the United States. But, at prices ranging from about $20,000 to nearly $60,000, those cars are prohibitively expensive for a budget-minded government.

GSA officials said the decision not to renew its contract with Ford was based on economics.

"This has nothing to do with Chrysler," said GSA spokesman Joe Slye. "It's based on economics. The [Ford] price was too high . . . . We buy the best product for the best price, because we're a major buyer."

However, Slye said GSA has not ruled out purchasing cars with some sort of passive-restraint system. How such a purchase could be made, though, was not clear, since Ford is the only supplier and its offer has been ruled out as too high.

"We're going to take another look at the marketplace," Slye said. "We are very serious about getting passive restraints."

"I don't know what could have changed between now and last year," said John Cook, senior vice president of the Insurance Institute for Highway Safety, based in Washington. "The government bought 5,000 of these Ford cars last year and they had orders for 2,000 more this year. If the government was discriminating at all" in buying the air-bag-equipped cars from Ford, "it was discriminating in favor of safety," Cook said.

As of Feb. 1, according to the most recent NHTSA summary of the government's experience with air-bag fleets over the last year, there have been 53 accidents with air-bag deployment after a total of 94 million miles of travel.