State legislators from Prince George's County have killed a bill that would have extended the life of a controversial program under which the Washington Suburban Sanitary Commission sets aside a portion of its construction work for minority-owned firms.

At the same time, the Montgomery County delegation to the General Assembly killed another bill, for the second year in a row, that was aimed at reforming alleged abuses in the Wssc's contracting process. These irregularities are believed to add from 10 to 15 percent to the cost of water and sewer lines, costs that are passed on to homeowners. The legislation would have allowed developers to contract directly for the installation of water and sewer lines to new homes, rather than use WSSC contractors. The WSSC now has the sole authority to build water and sewer lines in Montgomery and Prince George's.

The first bill would have given new life to a 1979 law set to expire at the end of June under a sunset provision. Under the minority set-aside program, as it is called, the commission designates certain contracts, valued at $100,000 or less, for bidding by firms that are at least 50 percent owned by minorities.

According to two Prince George's delegates who voted against the bill, the legislators felt the program favors a few firms that are large enough to bid successfully on WSSC contracts without the help of the minority set-aside program. A Washington Post series last summer also reported that firms set up by non-minority contractors -- often companies that regularly receive other contracts from the WSSC, but are headed by figurehead minority owners -- were bidding on contracts.

One example cited was the first minority contract awarded, which went to Fred Locklear Co. The firm's president and sole owner, Fred Lockear, was an employe of Concrete General Co. of Rockville both before and after doing the job. Locklear, who is of American Indian descent, did the job with four rented Concrete General employers. His equipment also was rented from Concrete General, a longtime contractor for the WSSC. a

Del. Timothy Maloney (D.), who voted in committee to kill the bill, said, "The WSSC provided us a list of who the minority contractors were. It was just creating a preferential market for two contractors, who had not needed it for 20 years."

Del. Frank J. Komenda (D.) said the minority set-aside program would work as well without the legislation as with it.

The WSSC agrees, and plans to continue the program without a legislative go-ahead, according to spokesman Art Brigham, who added that the commission does not need the law to maintain the program.

Marge Johnson, director of minority programs at the WSSC, said that while, "the program is not as impressive as we would like it to be," the commission is improving its efforts to help deserving minority companies get work.

Johnson said that the 10 contracts bid on under their minority set-aside program since last July have gone to five firms. The lion's share of the contracts, with a total share of the contracts, with a total value of $280,028 out of more than $28 million in WSSC contracts awarded during the period, went to Lisbon-Madeira Ltd., and Alejo Lopez Jr. Construction Co. Both companies have been successful bidders on WSSC contracts outside the set-aside the program.

These larger, better-capitalized firms can underbid the smaller minority firms, while at the same time bidding a higher price than would prevail under open bidding. They also still can bid competitively on the nonminority contracts. There is no limit to the size of a "minority firm" under the program.

Although Johnson acknowledged that the program is "a windfall" for a few companies, she said that other, smaller minority firms capable of winning contracts are "calling my office every day." The commission will continue the program despite the problems because of its commitment to giving a "piece of the action" to minority firms, she said.

The second bill, also backed by the WSSC but killed by the Montgomery delegation, would have allowed developers of new home to contract for the installation of new water and sewer lines themselves, rather than have to depend on a handful of contractors who hold contracts to do the work for the WSSC.

The 10 to 15 percent higher costs of water and sewer lines that often result when WSSC's contractors, do the work are incurred when developers, anxious to have the work completed more quickly than the WSSC requires, make extra payment directly to contractors to get faster service.

Similar legislation was considered during the 1980 session of the legislature, but was killed by the Prince George's County delegation.

The bill was one of three measures of similar intent considered by the committees of the Prince George's and Montgomery delegations that deal with bicounty matters. One of the other two bills would have mandated that developers do their own contracting for the work, which raised fears by small developers that their initial building costs would be raised. The second would have allowed the developers to contract the work and be reimbursed by the WSSC.

Both bills were killed by the Prince George's delegation in favor of a nonmandatory measure that would simply have allowed developers to put in their own water and sewer lines and pass the cost to the home buyers. The bill was sent on to the Montgomery county delegation where the only delegate who voted for it was Republican Robin Ficker.

While the Maryland Suburban Homebuilders Association, an important development and construction lobby, originally was in favor of the bill, the association withdrew its support because it feared the bill could be the first step toward requiring developers to put in their own lines, according to Joe Rodgers, a past president of the organization.

According to Montgomery legislative liaison Kathy Heyman, County Executive Charles W. Gilcrist felt the bill was "complex" and needed further study. A position paper recommending that the bill be considered in "summer study" was the major cause of the bill's death this month, according to delegation chairman David L. Scull (D.).

Scull said the delegation "still favors the concept" and will consider the bill next year. But Ficker said:

"Anytime they want to delay or kill something they sent it to summer study. It's a way to getting people to forget all about it."