THE CITY COUNCIL took a prudent step the other day when it deferred a vote to confer upon Pride, Inc. - without competitive bidding - a contract for building bus shelters and selling advertising on them. Council members saw the deal as a way to augment the city government's revenue by a modest amount; they figured that the scheme might serve a secondary purpose of easing the financial burdens on Pride, the city's best-known community organization. But they stopped short when the point was made that contracts of this sort should be open to competition.

There remains much to be said for saving Pride. Created in 1967 to give job training to many of the city's young people, Pride gained an impressive reputation by working with youths with little education and long police records. The hard-nosed approach of the directors, Marion Barry (now a City Council member) and Mary Treadwell, led to projects still remembered around town: neighborhood rat control, clean-up crews throughout the city, voter-registration campaigns and several small business efforts including landscaping, grocery-store management and service-station operations. In later years, Pride took on the task of providing thousands of trash cans around town, each with panels of paid advertising. It also assumed the management of Clifton Terrace, an apartment building with a history of disrepair and mismanagement.

There have been financial crises from the start, though the present one may cause Pride to close its doors for good. For one thing, the trash-can venture collapsed, at least partly because of unhelpful interference by a few city officials. What's more, Clifton Terrace is in jeopardy of being foreclosed by the Department of Housing and Urban Development, on the grounds that Pride is not managing it properly. But the real problem is that Pride simply doesn't have enough money. It has been living hand to mouth.

Such a constantly precarious situation has prompted people to wonder if Pride has outlived its usefulness. We think not. The organization still deals with the desperation in the lives of some of the District's residents. There is a question whether it can gather enough resources to do that job on a sufficiently large scale to justify its continued existence. Part of the answer may come if Pride can manage to bid competitively - as it should be required to do - on the bus-shelter contract.