The D.C. Council voted yesterday to override Mayor Marion Barry's veto of a bill prohibiting him from signing contracts worth more than $1 million for services or office space without council approval.

But council members rejected a companion measure that would have blocked the mayor's ability to protect the jobs of political appointees and other employees in the final days of his administration.

Mayor-Elect Sharon Pratt Dixon had urged the council to approve both measures to guard against the possibility of Barry awarding lucrative contracts or leases to his political allies or approving last-minute promotions for supporters in the government.

"Short term, I think we have prevented a whole lot of deals being signed," said council member Betty Ann Kane (D-At Large), chief sponsor of both measures and a member of Dixon's transition team. "Long term, I think we have closed a loophole in the procurement law."

The council will vote next week on whether to make permanent the emergency restrictions on the mayor's contracting and leasing authority, which are effective for only 90 days.

Kane, who will leave the council in January, also declared victory on the promotions issue, although the council defeated her bill. She noted that Barry last week reissued an order that had expired Sept. 30 prohibiting all promotions, quality step increases and merit awards to city employees.

In other action yesterday, the council rejected a 2 percent pay increase for 24,000 city workers, citing the District's growing budget crisis.

The council voted in October to limit Barry's discretion in awarding contracts, a move that some members said was needed to prevent Barry from overspending during his last months in office. Barry promptly vetoed the unprecedented measure, saying it would void existing contracts and lead to costly court challenges against the city, which set the stage for yesterday's veto override on a voice vote.

Kane's proposal stemmed largely from concern about the nature and intent of lease agreements approved by Barry in recent months.

One, signed in May, would commit the city to a 20-year lease for a new building to serve as a temporary city hall while the District Building is being renovated.

Under that $216 million lease, city employees would move into a building to be constructed at 800 North Capitol St. by a group of developers, including sports agent Richard A. Bennett Jr. Bennett was a major campaign contributor to Barry before the mayor scuttled his reelection plans.

Some council members opposed the lease because it was the most expensive of several sites considered by the Department of Administrative Services, and because of concern that the project would not be completed until August 1991, when the government is scheduled to move out of the District Building to permit renovations to begin.

The council lacks authority to cancel the lease, but it can refuse to provide funding when it considers the 1992 budget in February.

Bennett also is involved in another leasing plan, which the council approved without discussion on a voice vote. The plan, which could bring the city from $32 million to $34 million in rent payments over several years, calls for development of three office buildings, a day-care center and nursery school on nearby city land at New Jersey Avenue and H St NW.

In another leasing proposal, the council rejected by voice vote Barry's request to declare a tract of city land surplus property to make way for another construction project. Under that plan, the city would lease the site of the Department of Employment Services building at 500 C St NW. The building would be razed to make way for a new one, and a private developer would construct a building elsewhere for Employment Services and other offices.

Kane has argued that the city has not determined whether that would be the best disposition for that site.

Several council members expressed concern that Barry, who leaves office in January, may take actions in the interim that would worsen the city's fiscal crisis amid severe cash flow problems.

Some council members have suggested that the mayor has been shifting his appointees to permanent job positions to protect them from Dixon, who has pledged to eliminate 2,000 mid-level management jobs within the city's 48,000-member work force.

The Kane measure defeated yesterday by a 7 to 6 vote would have been retroactive to Oct. 1 and would have temporarily prevented employees under the mayor's authority from obtaining new appointments, being converted to career service status, receiving promotions or receiving pay increases and other cash incentives.

Council member Jim Nathanson (D-Ward 3), who supported the proposal, conceded that "this is classic lame-duck politics." But he contended there is a need to prevent "last-minute appointments that may or may not prove of assistance to the next mayor."

Barry has denied approving anything but routine contracts or making any unusual personnel moves. In a letter submitted to the council, a Barry aide said it is "unfair" to revoke promotions or new appointments made since Oct. 1.

The letter argued that it is "uneconomical" to prevent term or temporary employees from competing for appointments in career service, and contended such restraints could hamper city services in some areas.

The council has asked the city auditor to review Barry's personnel moves to determine whether they were politically motivated. But that audit has not been completed.

In response to Kane's request for an update on personnel moves, Garland Pinkston, director of the mayor's Office of Intergovernmental Relations, said in a letter that from June 1 to the present there were 325 personnel actions classified as promotions.

Of those, 44 percent "had no impact on the appropriation," Pinkston said. He said 187 of those "were the direct result of competitive recruit actions" to fill essential vacancies. He said the remaining 138 actions "were the result of merit based career ladder promotions" and other reasons.

In arguing against Kane's measure, council member Harry Thomas Sr. (D-Ward 5) said he believes the mayor should be allowed to protect some employees before leaving office.

Council member Charlene Drew Jarvis (D-Ward 4) told her colleagues that "the mayor is eminently untrustworthy," but she echoed concern that an emergency proposal to limit his personnel actions was not merited.

Others, including council member H.R. Crawford (D-Ward 7), argued that Kane failed to prove that Barry is shifting his loyalists to new jobs.

Crawford said the proposal would "penalize the little guys. I view this as sour grapes."

Council member John A. Wilson (D-Ward 2), who questioned the legality of the proposal, said it would be akin to "killing a flea with a sledgehammer."

In a related matter, the council voted 9 to 4 to block Barry's authority to make new appointments to city boards and commissions.

The council also received a proposal to limit the mayor and the council chairman to two terms. That proposal will be considered in the council's Nov. 20 meeting.Staff Writer Michael Abramowitz contributed to this report.