Jose Gutierrez, the ousted former head of the District's purchasing department, has given up his court battle with Mayor Marion Barry seeking reinstatement and $3 million in damages.

"I have run out of gas," Gutierrez said yesterday. "I want to put it all behind me."

Gutierrez had earlier lost preliminary rounds in the courts. U.S. District Judge John H. Pratt ruled last month that the firing of Gutierrez was proper. The mayor could "act summarily for reasons of his own" because Gutierrez was in a position in which he served at the pleasure of the mayor, Pratt said.

Gutierrez went public in March with allegations of irregularities in city contracting practices and charged that City Administrator Thomas Downs had pressured him to approve contracts for political reasons. Barry demoted Gutierrez, who had been the highest-ranking Hispanic in the mayor's administration, and fired him in May.

Gutierrez said the firing was in retaliation for his exposing wrongdoing, and he filed suit against Barry, Downs and two other top city officials.

Downs responded that he had had to revoke Gutierrez's authority to sign leases in early January because of repeated "insubordination and incompetence."

Yesterday Downs said that "there was never in my mind a credible issue that was raised by Gutierrez in the contracting process."

Gutierrez said yesterday that his legal bills total $20,000 and "it has become difficult to find a job." Asked whether he would make the same public allegations again if he had it to do over, Gutierrez said he did not know.

"I have strictly negative memories about all this," he said.

On whether he stands by all of his original allegations, he said: "What difference does it make? It doesn't help me."

On June 26, U.S. District Judge Oliver Gasch upheld the District government's plan to cancel a $22.9 million lease agreement negotiated by Gutierrez and described him as "an unfaithful servant" who had circumvented D.C. purchasing rules to award the lease to a firm headed by a friend.

The judge rejected a bid by the firm, Perpetual Building Limited Partnership, for a preliminary injunction that would have made the city continue the leases for the building at 1111 E St. NW.

Yesterday the U.S. Court of Appeals denied a motion for injunctive relief by the partnership and said "it is doubtful" that the firm had raised a substantial enough federal claim to give the district court jurisdiction in the matter.

The court said the firm "has presented no plausible evidence that it has been 'debarred' or 'suspended' from entering into future contracts with the District of Columbia."