LAST WEEK the D.C. Council took welcome steps to preserve freedom and governing room for the incoming Dixon administration. The council overrode Mayor Marion Barry's veto of a bill that prohibited his signing contracts worth more than $1 million without council approval, and voted to block Mr. Barry's authority to make new appointments to the city's boards and commissions, leaving the new mayor free to make her own choices. Now, some council members want to go much farther.

Tonight the council may take action on a bill submitted this summer by Betty Ann Kane. The best and most important part of the bill would require competitive bidding standards for leases of real property involving the space needs of D.C. government agencies. Other features of the bill -- less important, in our opinion -- would permanently subject long-term leases worth more than $1 million to a 60-day period for review by the D.C. Council. If the council took no action during that period, the lease would take effect. A third section of the bill would require council review of building projects worth more than $1 million that involve the construction of buildings, acquisitions of buildings or the acquisition of an interest in a building if it is to be used to house a D.C. government agency or a D.C. government program.

Unfortunately, other council members are expected to add an amendment to the Kane bill which would make permanent the temporary legislation that now restrains Mayor Barry's signing of contracts. That temporary bill was a prudent effort to guard against the real danger that contracts would be awarded at the last minute to Mr. Barry's allies and supporters, drastically diminishing the ability of the incoming administration to review policy and to conduct its own business. It should not be extended to constrain Mrs. Dixon and future mayors. The new mayor deserves some running room in addressing the city's contracting and procurement problems.

We believe the council, or at least a number of its members, was much too casual in exercising its oversight function of the administration's activities during the Barry years. That it intends to be more attentive now is good news. But sufficient regulations and statutory structure are already in place to do this without imposition of extraordinary measures such as those required to cover the next couple of months. The council, and the new mayor, would do well to make certain that the D.C. government adheres to these existing requirements. A need for permanent council oversight of every contract for goods and services worth more than $1 million has not been established.