Jose Gutierrez, the District's former top purchasing official, has stepped up his allegations of improper interference in the award of city contracts and is now contending that Mayor Marion Barry directly took part in attempts to have him approve city contracts for political reasons.

Since Gutierrez went public with his allegations three weeks ago, he has confined his claims of political interference to City Administrator Thomas Downs, who has denied Gutierrez's statements.

But in a letter sent Wednesday to the mayor's legal counsel, who is investigating Gutierrez's handling of city contracts, Gutierrez's attorney, Luis M. Nido, called for the probe to be expanded to include Barry's alleged involvement in efforts to influence Gutierrez. Nido also asked Herbert O. Reid Sr., the mayor's counsel, to withdraw from the investigation -- a request that Reid rejected in a written response to Gutierrez.

"It must be obvious . . . by now that some of the matters raised, and therefore to be investigated, include allegations of direct involvement by the mayor himself," Nido said in his letter. Nido also said for the first time that Downs' alleged efforts were done "on behalf of, and for the political or other intersts of, the mayor."

Nido said Reid should remove himself from the investigation because there is an appearance of a conflict of interest, particularly since there are allegations involving "your personal client, the mayor."

Barry has repeatedly denied steering contracts to political allies.

Reid, in a written reply to Gutierrez, refused to remove himself from the investigation and accused Gutierrez of attempting to divert attention from his actions while he headed the Department of Administrative Services, the city's chief purchasing agency.

Reid also said he has not received any specific allegations involving Barry from Gutierrez or anyone else.

The mayor's lawyer also renewed his request that Gutierrez submit by the close of business today a "complete statement" documenting his allegations of political interference in the award of city contracts.

Nido said yesterday that he is in touch with Reid but declined to say whether Gutierrez will comply with Reid's request. Reid rejected a request from Nido that Gutierrez be given more time to prepare his response until the issue of Reid's involvement in the probe is resolved.

Other city officials, including City Council Chairman David A. Clarke, have said it would have been more appropriate for the city inspector general's office to investigate the allegations instead of Reid.

Barry demoted Gutierrez to a low-level job in the city planning office after he went public with his allegations and ordered Reid to investigate Gutierrez for possible conflicts of interest or other violations in his handling of contracts.