Mayor Marion Barry yesterday signed a five-year regional contract for disposing of the more than 1,200 tons of sludge generated daily at the Blue Plains sewage treatment plant, intended to save money and prevent the kind of disposal crisis that developed a year ago.

The city and three surrounding jurisdictions that use the plant also signed an agreement to share the costs of expanding it to increase its average capacity from 309 million gallons of wastewater a day, to 370 million gallons.

Each jurisdiction -- D.C. and Fairfax, Montgomery and Prince George's counties -- is to provide the capital financing for its proportionate share of building the new facilities.

The federal government required such an agreement before it would consider providing construction grants, the mayor's office said.

The sludge-hauling contract, worth $74.5 million over the five-year period, was awarded to two joint ventures that include firms that have received many of the past contracts to dispose of sludge for individual jurisdictions in the area.

The District manages and operates the plant for itself and the surrounding jurisdictions.

"These two actions are an example of the best kind of regional cooperation," Barry said in a statement.

A year ago, the District had a growing mountain of sludge at Blue Plains, and the disposal problem became critical after the firm the city hired to dispose of most of it lost its dumping permit.

The city started a search for a place to put the sludge. After much negotiation, the area jurisdictions reached an agreement earlier this year for disposing of the hundreds of thousands of tons of sludge that had piled up, and agreed to enter into a joint, multi-year contract, rather than the separate contracts they had been letting.

The contract is for disposal of 1,270 wet tons of sludge a day to two firms: a joint venture of Ad & Soil Inc., Enviro-Gro and MTI Construction, called ADEM, and a joint venture of Jones & Artis and Bio-Gro/Bevard, called JABB.

JABB will get about $12.4 million a year for disposing of 500 tons a day of digested (more highly contentrated) sludge and 570 tons a day of undigested sludge.

ADEM will get about $2.4 million a year for hauling 200 tons a day of digested sludge.