District of Columbia police officers won another, perhaps decisive, round yesterday in a year-old fight with Mayor Marion Barry's administration over pay raises, as the D.C. Public Employee Relations Board (PERB) denied the city's request to overturn an arbitration panel's contract award that favors the police union.

Donald H. Weinberg, the city's chief labor negotiator, said the city is looking at its options for dealing with the pay issue, which include appealing to the courts or to the D.C. City Council, but that he had not yet made his recommendations to the mayor on what to do next.

"It really comes down to this, it's time for the mayor to give up," said Gary Hankins, head of the police union's labor committee.

A three-member arbitration panel ruled last month in favor of the Fraternal Order of Police (FOP) in its request for a 15 percent wage increase over three years. The compensation package, retroactive to last Oct. 1, must be submitted to the City Council and becomes effective in 60 days unless two-thirds of the council -- nine of the 13 members -- vote to overturn it.

Hankins and Bernard Demczuk, legislative representative for the American Federation of Government Employees (AFGE), which is supporting the FOP in its efforts, said there is a solid majority on the council supporting the arbitration award. Demczuk said he counts "nine strong votes against the mayor" on the council if he tries to get it to overturn the award.

Barry had argued that meeting the contract award for 3,300 FOP members, the city's first salary dispute decided by binding arbitration, would cost the city $23 million more than his administration's last contract offer. The mayor said it would set a bad precedent by encouraging unions to count on the arbitration process rather than good-faith bargaining to win more lucrative contracts.

In addition, the city has pointed out that the award reverses a longstanding policy of paying police officers and firefighters the same salaries. The D.C. firefighters union already had accepted lower pay raises than those awarded to the police union.

In a two-page opinion, PERB said it had the authority to review and overturn an arbitration award only if the arbitrator exceeded his or her jurisdiction; the award on its face is contrary to law or public policy, or was procured by fraud, collusion or other unlawful means.

The city's arguments for review of the award "reflect only disagreement with the arbitration panel regarding the merits" of the case, the PERB opinion said in denying review.

The FOP and the city started negotiating last June for a three-year contract to replace the one that expired last Sept. 30.

Pay scales for police officers under the old contract range from $19,850 to $28,584. Under the arbitration award, police officers would get a 4 1/2 percent pay increase retroactive to Oct. 1, meaning back pay of perhaps $800 to $1,000 for some, according to Hankins.

Police officers would get a 5 percent raise in October and a 5 1/2 percent increase in October 1986.

Separately, AFGE has charged that the city did not bargain with it in good faith, because it understated 1985 revenues available for raises, and has asked PERB to reopen its contract talks.