Metro Board members, concerned about the unreliability of Farecard, the automatic fare-collecting equipment, held a one-hour closed session yesterday to discuss ways of improving the system and possible actions against its manufacturer.

"It's not working," Metro board member Francis B. Francois said after the session. "The system has inherent problems and it's driving some people away. We may be relying too much on mechanization."

The Farecard system is being manufactured for $52 million by Cubic Western Data, a subsidiary of the Cubic Corporation. The system includes gates at both entrances and exits, vending machines that take money, make change and dispense tickets, and "Addfare" machines that permit a rider to get out once he is trapped inside the system with inadequate money on his ticket.

In total, there are about 250 Farecard machines scattered throughout the Metro system. On an average morning, 40 of those machines have been "out of servce" when Metro attendants opened the stations, according to Nicholas J. Roll, Metro assistant general manager.

But a machine may be working properly even if it says "out of service." It may be out of tickets or full of money - both problems that Metro is supposed to fix. Maintenance of the machines is performed on contract by Cubic Western.

"It is evident that not all the problems are the fault of Cubic Western," Francois said. "We're going to get a study on just exactly what it is that causes machines to break down."

Cubic Western vice president R. I. DeKoran, in a letter Wednesday to the Metro Board, said that reliability tests show that the Farecard system "is meeting and in most cases exceeding the contractual requirements." "We challenge that," Francois said.

Francois said he is confident the entrance and exit gates can be made to work, but suggested studies should be made about whether having people selling Farecards might not be cheaper in the long run than maintaining balky vending machines.