Renewal of a federal cancer research contract with a private firm headed by a member of the National Cancer Institute's advisory board has been held up pending a government audit, Rep. David R. Obey (D-Wis.) disclosed yesterday.

Obey's office said payment of $237,605 for renovation of an animal breeding facility at the firm - the Eppley Institute at the Universtiy of Nebraska in Omaha - also has been withheld until the investigation is completed.

Eppley, headed by Dr. Phillippe Shubik, currently holds a $3.2 million NCI research contract and has received nearly $20 million in NCI contracts since 1968, according to Obey's office.

A previous investigation by the General Accounting Office, done at Obey's request, indicated that Eppley is also closely affiliated with an industrial research facility that does work for major U.S. corporations, sometimes, according to Obey, using materials bought with federal money in performing tests for the corporations.

Shubik serves on the White house-appointed advisory board that oversees NCI and until two months ago headed its subcommittee on environmental cancer.

NCI's request for an audit followed the GAO investigation, which, according to Obey, suggested a possible conflict of interest in Eppley's operations.

GAO, the congressional investigative agency, also found that NCI's normal procedures were not followed in the rewarding and renewal of Eppley contracts, which came in increasily large amounts despite what Obey called "strongly negative comments by a number of outside reviewers."

The audit will be done by the Department of Health, Education and Welfare, which oversees NCI's operations.

Eppley's current contract with NCI expired June 30 and is to be extended administratively at current levels of support until Sept. 30, according to an NCI memorandum released by Obey's office. Negotiations on renewing the contract will be conducted in late August or early September, it said.

The audit request sought information on whether funds provided by the federal contract were used for other purposes, whether Eppley accounted properly for equipment purchased with federal funds, whether tests animals bought with federal funds were used for industrial research clients, and whether Eppley had NCI approval for projects it undertook with the contract funds.