The Maryland Department of General Service - the state's chief purchasing agent - has decided to award all state contracts of $5,000 or less ot minority businesses.

The action means that $15 million of the $90 million in state general services contracts would automatically go to minority firms.

"We haven't had enough effort in this area" of stimulating black business, said J. Max Millstone, secretary of the department. A state law went into effect last month calling on the department to "attempt to achieve" a minimum of a 10 percent share of state contracts for minorities.

"I'm just trying to implement the intention of the state law," Millstone said.

Spokesmen for area chambers of commerce denounced the decision yesterday, saying, "It's like being hit with a cold shower. This violates the pure simple competitive nature of bidding."

The contracts awarded by the general services department range from those for breakfast cereals for prison inmates to uniforms and work clothes for hospital personnel.

Last year only $45,000 in contracts were awarded minority businesses. The new policies would permit only minorities to bid on contracts of $5,000 or less.

The law defines minorities as blacks, Hispanics, American Indians, Alaska natives, Asians, Pacific islanders, women and the physically or mentally disabled.

Originally, Millstone decided the policy would apply only to blacks, rather than 11 different minority groups. "It's easiest for us to identify blacks and we felt we could implement the policy most rapidly that way," he said.

But yesterday, Millstone said he would extend the policy to all minorities because of pressure from minority business groups.

One of those groups, Maryland Minority Contractors Inc. of Baltimore, has an all-black membership. "We told Millstone he couldn't limit bidding just to blacks," said Hanford Jones, executive director. "He'd start getting people real angry at blacks. The law specifically says that minority businesses had to be helped, not just black businesses."

Jones said he applauded the policy but that a similar policy is needed for construction contracts.

Ernie Honig-Kent of the Maryland Chamber of Commerce charged that the policy was a case of reverse discrimination. "We have supported in the past affirmative action but not specific quotas," she said. "The large businesses won't be badly hurt because these contracts are not in competition with them. But the white small businessmen may have a problem."

She said she had not received complaints from small businessmen, but "would not be surprised" if she did so.

Millstone called the policy experimental and said it might be revised in 30 to 60 days. A problem that could result in its revision is that there are only 59 minority businessmen registered to do business with the state, and they do not provide all the products the state has purchased in contracts of $5,000 or less.

"In a lot of cases blacks have similar businesses," Millstone said. "There aren't any blacks in the drug business, for example, or in the cereal business. We hope this policy encourages them to expand."

Millstone said he chose $5,000 as the limit for each minority contract because the law does not require competitive bidding for contracts less than $5,000.

Millstone's policy is somewhat similar to one enacted by the Washington Metropolitan Area Transit Authority. In 1976, Metro decided to allot 15 percent of contracts on the subway system to minority contractors.

In 1971, minority firms had received only 1 percent of the total contract funds. But because of Metro's policy, they have been awarded an annual average of 5 percent of the contract funds since then.