Each day for 11 years, John O'Mally has edited the Commerce Business Daily, the official government publication advertising federal contract opportunities.

Having published tens of thousands of contract advertisements in the small daily tabloid, O'Mally is distressed. He has the uneasy sense that most of the advertisements are meaningless -- that there will be no competition for contracts.

"The system isn't working as it was intended," says O'Mally.

He is right.

In two-thirds of the 16,101 advertisements listed in 1979, the government announced that it already had selected a probable contractor.

"When the ad gives the name of a firm, you might as well forget it," O'Mally says. "That's a pretty clear tipoff that there's not going to be any competition.

Laced among the remaining one-third of the advertisements are a variety of other methods for avoiding competition, says O'Mally.

"There's the miscoding scam," O'Mally says. "Something will deliberately be miscoded so that no one else can find it . . . That happens pretty often."

Another common practice is for an agency to advertise for a contract -- but to list the closing date for bids only one or two weeks after the ad appears.

Countless other contracts are never advertised at all.

The Office of Management and Budget estimates that $13.4 billion was spent on research contracts in fiscal year 1979. The Post's study of all 13,848 research, and consulting contracts published in the Commerce Business Daily in 1979 showed a total of $9.3 billion. OMB officials say the discrepancy could indicate that many contract awards are not published.

Many in the industry totally ignore the Commerce Business Daily.

"Anybody who believes you read the CBD and get your contracts is out of it. You'd starve," said Vince Villa, a Washington consultant.

But the government continues to spend $550,000 a year printing 33,000 copies five days a week. "It's depressing . . . I had no conception of what was going on until I started working here," said O'Mally. "But now it's worn off."