When it came time to award the $25 million consulting contract to oversee construction of the Baltimore subway, the Maryland Department of Transportation followed carefully constructed guidelines designed to select the most qualified firm without the corruption that has so often infected that kind of process.

It was the decision to ignore those guidelines by the Board of Public Works - consisting of the governor, the comptroller and the reasurer - that prompted the resignation Thursday of state transportation secretary Harry R. Hughes, Hughes said yesterday.

Hughes' resignation, accompanied by his charges that a politically influential contractor has "tampered with" the selection procedure, followed months of conflict with the state's three highest officials over their rejection of the contractor Hughes' department had chosen.

The contractor who allegedly did the tampering after being rejected as the least qualified by Hughes' department, was Victor Frenkil, a personal friend of both Gov. Mandell and Comptroller Louis L. Goldstein.

In a four-hour interview yestereay, Hughes recalled how he agonized over leaving the super-agency he had headed since its inception in 1974. He finally decided he either had to "acquiesce and go against all I had fought for, or quit. I had no choice."

Hughes said that when Gov. Marvin Mandel chose him to head the new agency six years ago, Hughes recognized that the new department combined under one roof many of the agencies that historically have been targets of corrupters - mass transit, highways, airports and shipping.

Hughes said that because the department awarded huge contracts for public construction projects, he pushed for regulations that would insulate the biding process from chicanery.

The safeguards in the selection process grew out of legislation approved by the 1974 General Assembly. Hughes said he sought tighter controls over consultant contracts after federal prosecutors in Baltimore subpoened records of state agencies in connection with their investigations of then Vice President Sipro T. Agnew and Dale Anderson, Agnew's successor as Baltimore County executive.

The process calls of bidders to be screened initially by transportation department staff specialists, who give weighted value to their previous experience, financial condition, technical proficiency and cost proposals.

The DOT technical staff narrows the bidders to a final five, which then are examined by a selection board of five members, two of whom are appointed by the governor to represent the public, and three top officials of DOT.

In his surprise announcement of resignation on Thursday, Hughes charged that the Board of Public Works had permitted unsuccessful bidders to "tamper" with that process.

Hughes contended that the works board decision to ignore the DOT's recommended contractor for the highly prized job of management consultant for the $721 million Baltimore subway was prompted by complaints from Frenkil, a Baltimore contractor whose firm was part of a consortium that unsuccessfully sought the contract.

State Comptroller Louis L. Goldstein, a long-time friend and former business partner of Frenkil, said yesterday that he voted to reject the DOT proposal because he didn't understand how it had arrived at its selection of the Ralph M. Parsons Co.

"After 20 years of voting on contracts, it's become my policy to vote against one that I don't understand," Goldstein said.

He said he couldn't remember if Frenkil had talked to him about the project, but an aide to Goldstein later checked the comptroller's records and said it appeared that all five finalists in the biding had contacted his office.

The proposal offered by a team headed by Singstad, Kehart, November, and Hurka and including Frenkil, was rated last of the five finalists. Hughes said that the Frenkil group's bid was lower than the others because it grossly underestimated the amount of man-hours required in the project, another indication, said Hughes, that the firm "wasn't qualified for the project."

In both steps of the process, the Ralph M. Parsons Co. ranked first, Hughes said.

Hughes noted that when proposals were first sought, 18 firms responded, and that Frenkil's outfit was "a prime participant" in one proposal. The Frenkil bid didn't survive the first cut, when the list of 18 was cut to 11.

"But by the time the list of 11 was reduced to five, victor popped up as a major subcontractor - with 30 per cent of the action - one one of them," Hughes said.

Even before the selection board made its final choice, Frenkil was lobbying behind the scenes.

Hughes said Frenkil apparently learned "even before the board did" that his consortium had received a low rating, because "he was complaining about it before it came public."

One person Frenkil contacted, according to Hughes was Judge Joseph Carter, vice chairman of the department's selection board. Apparently as a result of questions raised by Frenkil, Judge Carter abstained in voting as the board picked Parsons by 4 to 0.

About the same time Frenkil was protesting the selection of Parsons, he also was reportedly trying to strike a deal with Parsons for his firm to be a subcontractor.

In a memo to Hughes last Sept. 30, deputy DOT secretary James J. O'Donnell wrote that Parsons' construction manager, John D. McKinney, said that Frenkil had told him that it would "certainly make it easier" for Parsons if his company, Baltimore Contractors, got a piece of the action.

O'Donnell wrote that "I suspect that at least one of these contacts (by Frenkil to McKinney) was made before any of us at DOT or selection board members knew that the secreening committee had settled on Parsons as the number one choice."

Frenkil then switched the attack to the works aboard, contending that his consortium could do the work cheaper.

It was the decision by the works board to reject the Parsons nomination that finally ranked Hughes to the point of resignation.

"The works board is supposed to either approve or reject our recommendation," Hughes said. Instead, it laid down new guidelines for weighting the bids, which Hughes said subverts the process.

Lt. Gov. Blair Lee III, who sat in for the ailing Mandel at recent works board meetings, said that while he considers Hughes a friend of long standing, he believes Hughes "thinks the selection process was sacroscant, perfect, shouldn't be touched. Well, I disagree."

Lee said he felt the works board members were confronted with "a situation of which they had no rational basis to decide which was the best bid. We ended up with five proposals, and that was a fatal flaw."

The lieutenant governor said he is hopeful a procedure, suggested by the works board, will be approved by federal officials. It calls for the five finalists to submit new proposals "couched in the terms of the department's own estimates of hours and level or expertise so they are all bidding on the same thing.

"We want a basket with five apples in it instead of what we got before, which was a basket with an apple, an orange, a strawberry, a banana and a watermelon."

Frenkil dismissed Huges' complaints as political. "He'll be a good governor," Frenkil said when contacted at a party Thursday at which he was honored by the Society for the Preservation of Maryland Antiquities for his restoration of the old Belvedere Hotel in Baltimore.

Hughes said yesterday that "I intend to practice law in Baltimore," although he would not rule out the possibility that he will be a candidate for governor next year.

Mandel, who is scheduled to go on trial again next Wednesday on Federal corruption charges, is barred from seeking a third term, but has not indicated who he favors to succeed him.

It already is a crowded field, with Lee, Goldstein, Attorney General Francis B. Burch and Senate President Steny H. Hoyer running strong.