A D.C. Council committee, citing irregularities and apparent conflicts of interest, rejected a proposed Washington Convention Center food service contract worth millions of dollars yesterday and said the center should start over with new bids.

The committee's strongly worded action was the latest and most serious setback for the Convention Center board of directors, whose efforts to award a new contract have been mired in controversy since the spring of 1986.

In August, D.C. Auditor Otis H. Troupe issued a stinging report in which he said the center's board had not been "conducting its business in an aboveboard manner with regard to this {contract}." Troupe recommended that the bidding process be redone.

James M. Christian, legal counsel to the Convention Center, said the board would lobby the full council to overturn yesterday's action by the Committee on Housing and Economic Development. However, a top Convention Center official said it was unclear what action the board would take and that a special meeting of the board is likely soon to determine the center's next step.

Convention Center Board Chairman Kent T. Cushenberry was out of town yesterday and could not be reached to clarify the board's position, but other Convention Center officials said it would be difficult to persuade the full council to overturn the committee action.

"I don't see the full council repudiating the committee decision," said council member John A. Wilson (D-Ward 2), who voted with committee Chairwoman Charlene Drew Jarvis (D-Ward 4), Wilhelmina J. Rolark (D-Ward 8) and Betty Ann Kane (D-At Large) to disapprove the contract 4 to 0. Because of problems with the previous food service contract, the council in 1985 amended city law to require that the council review such contracts.

The Convention Center in the summer of 1986 awarded the food service contract -- worth more than $15 million over five years -- to a joint venture of Service America Corp. and its minority partner, National Business Service Enterprises, which is headed by Arthur McZier.

Since then, questions have been raised about McZier's business relationships in several unrelated ventures with David W. Wilmot, former chief counsel to the Convention Center, who played a key role in awarding the food service contract and continues to serve as a legal consultant to the center.

In addition, questions have been raised about the financial stability of Service America, which is being offered for sale by its financially troubled parent company, Allegheny Beverage Corp., and the role of William Jameson, the former director of the D.C. Minority Business Opportunity Commission. Jameson served a dual role of certifying minority firms that could bid on the contract while serving on the center's contract selection committee.

Council member Kane has said Jameson's role was one of the most serious conflicts, noting that Jameson disqualified one minority firm from the commission certification necessary to bid on the contract. Kane has complained that certification requirements have been inconsistently applied, leading to allegations of favoritism.

The five-member Convention Center board comprises chairman Cushenberry and members Charlotte G. Chapman, Luther H. Hodges Jr., Ann R. Kinney and William Lucy. All are prominent political supporters of Mayor Marion Barry, who also has close ties to Wilmot and McZier. Some critics of the proposed contract have privately complained that political considerations influenced the award of the contract, a complaint that those involved have denied.

One losing bidder, ARA Leisure Services Inc., has filed suit against the Convention Center, Service America and McZier's firm, charging that the contracting process was flawed and accusing McZier of breach of contract. McZier's National Business Service Enterprises initially had bid for the contract as a partner of ARA but switched to Service America in a second round of bidding. The case is pending in D.C. Superior Court.

A lawyer for ARA said yesterday that the firm filed new charges in September after it was learned that Troupe's audit had uncovered internal convention center papers that previously had not been turned over in court proceedings.

Troupe's report revealed that his staff had found notes from unidentified Convention Center staff members that suggested key board members "should privately see that {Service America and McZier's group} get together and this must be done cautiously" for the second round of bidding.

McZier disclosed in court proceedings last year that he has several business relationships with Wilmot, including a bus shelter advertising firm, local cable television and a proposed waterside restaurant. Wilmot and McZier previously have declined to comment on the Convention Center contract dispute.