A construction team formed by two companies has been awarded a $1.4 million contract to manage the proposed renovation of Washington's dilapidated railroad terminal complex at Union Station, federal officials announced yesterday.

The selection of the management team was described as a key step in carrying out plans for a $40 million restoration of the historic structure, which has been closed since 1981. The contract was awarded to Gilbane Building Co. of Providence, R.I., and Sherman R. Smoot Co. Inc. of Columbus, Ohio.

Secretary of Transportation Elizabeth Hanford Dole said the two firms had provided "the highest rated technical proposal and offered the lowest overall price." They were selected after negotiations with 16 firms, she said.

Last July, a group of developers and architects was chosen to plan and oversee the redevelopment project. They are drawing up complex financial agreements and preparing preliminary architectural plans, officials said, and restoration work is expected to start in 1986.

The new construction management team will prepare cost estimates, draw up construction schedules and eventually supervise the renovation work.

The renovation plans have called for cleaning and restoring the terminal to include convenient railroad facilities along with a variety of possible embellishments, such as a fountain court and circular stairway. Officials have said they hope to recreate the bustling atmosphere the once-elegant station had in its heydey.

The terminal's restoration is to be financed largely by $70 million in Amtrak funds. Officials have set mid-1987 as the target for completing the work. Earlier this year, the District government awarded a $24.8 million contract to finish an uncompleted, five-tier parking garage behind the terminal.

Federal officials said Gilbane has had extensive experience in restoration, including work for the Pennsylvania Avenue Development Corp., as well as projects in Baltimore and Alexandria. They described Smoot as a minority-owned firm that has acted as a general contractor and construction manager in the Washington area, including taking part in construction of an Amtrak station at New Carrollton.