A June 5 article incorrectly reported that a federal judge had ruled that the U.S. Army Corps of Engineers acted improperly when it rejected a $1 million bid from Ameron Inc. for construction work at West Point. The judge said the corps' action was "clearly justified by rational, established principles." The judge, however, said the corps was not justified in allowing another firm to proceed with the work after the General Accounting Office had ordered it not to award the contract after the GAO received a bid protest from Ameron. The corps had been following Reagan administration orders to ignore a provision of the Competition in Contracting Act.

The Reagan administration backed away from a constitutional confrontation yesterday as Attorney General Edwin Meese III instructed agencies to comply with a law that empowers the General Accounting Office to hold up a government contract if a bidder has challenged the award procedures.

Meese's order puts teeth in a decision last week by U.S. District Court Judge Harold A. Ackerman in New Jersey, who ruled that the government must comply with the law -- the Competition in Contracting Act of 1984 -- while it appeals his conclusion that the GAO provision is constitutional.

When President Reagan signed the bill, he said that provision violated the Constitution's separation-of-powers doctrine because it would allow an arm of the legislative branch, the GAO, to order executive branch agencies to hold up contracts. The administration cited the Supreme Court's 1983 decision that invalidated the legislative veto.

The Justice Department and the Office of Management and Budget subsequently told agencies to ignore the provisions.

But lawyers for Congress argued that there were legal precedents for allowing the GAO, in certain instances, to act as an independent auditor of government contracts.

Ackerman agreed with the congressional view.

"No man in this country is so high he is above the law," Ackerman said in his decision last week. "I order all parties, specifically the executive branch, to follow any ruling I make in this case."

Ackerman's ruling affirmed a temporary order he had handed down March 27 in a lawsuit brought by Ameron Inc. of Kenilworth, N.J. In that case, the judge ruled that the Army Corps of Engineers acted improperly when it rejected a $1.03 million bid by Ameron to replace aging reservoir pipes at the U.S. Military Academy at West Point, N.Y. The corps threw out the bid when it discovered a typographical error in a surety bonding provision.

The corps instead awarded the contract to Spiniello Contracting Co., of Morristown, N.J., which bid $1.26 million. Ameron filed a bid protest with the GAO and the auditing agency told the corps to hold up Spiniello's contract. The corps refused, prompting Ameron to file suit.

The administration's intransigence infuriated key members of Congress who had supported the provision to increase competition for federal contracts.

Last week, the House Government Operations Committee voted to cut off all executive branch procurement funds if the administration did not relent.

In his decision last week, Ackerman specifically admonished Defense Secretary Caspar W. Weinberger and Budget Director David A. Stockman for issuing orders that led the corps to ignore the GAO's ruling.

In a statement, Meese said yesterday that the disputed provisions "aggrandize Congress' role at the expense of the executive branch by giving the comptroller general, an arm of Congress, the power to control the expenditure of appropriated funds."

But Ackerman said that the comptroller general is an officer of both the executive and legislative branches, and that Congress itself plays no part in the GAO's bid review process.

In the meantime, the administration has appealed the decision to the 3rd U.S. Circuit Court of Appeals.