The house Appropriations Committee has voted to attach a significant requirement to the District's fiscal 1986 appropriations bill. It would force the District government to award all of its contracts through competitive bidding.

This is a serious slap at home rule for the District. Congress has gone beyond legitimate expressions of concern and decided to make its own policy. The decision may impair the District's effort to give minority firms a better chance to win contracts.

The same congressional committee decided to make another addition to the appropriations bill by voting to rename a city street after the World War II Swedish hero, Raoul Wallenberg. The desire to honor Mr. Wallenberg, who is credited with saving thousands of Jews and others from Nazi concentration camps, is admirable and well-intentioned, but it does not belong in the District's appropriation bill. Should Congress arbitrarily rename the District's thoroughfares whenever it desires?

Rep. Ralph Regula, author of the requirement on competitive bidding, says he acted to prevent favoritism and overpricing in city contracting. And here you reach the part that is the District's fault: the city made it easier for Congress to overreach because it failed to act quickly itself. Recent published reports have alleged that the District pays far more than it should for certain services, and the claim is far from new. This newspaper ran its own series on contracting by the District last August, pointing out that the District pays as much as 79 percent more for a wide range of supplies than surrounding jurisdictions do.

Little of significance has been done by the District to address that problem. City officials could have acted to demonstrate, not only to Congress but to city taxpayers as well, that they were serious about not wasting money, especially when their repeated refrain is how bad the city's budget deficit is.

True, the mayor was very quick in demoting and finally firing Administrative Services Director Jose Gutierrez for alleged contracting violations. But the speed may have had something to do with Mr. Gutierrez's own allegations of favoritism by members of Mr. Barry's administration in awarding city contracts.

Congress should give the city the fullest opportunity to eliminate any favoritism and wasteful spending. But the argument for home rule is strongest when city officials take action to deal with their own problems. It is weakest -- as now -- when nothing is done.