Earlier this year, the outcome of the Kentucky Derby seemed a foregone conclusion. Spectacular Bid would only have to show up at Churchill Downs to win.

But with the Derby just three weeks away, Spectacular Bid now appears likely to face a suprising amount of competition. He still is the overwhelming favorite, of course, but he will have enough able challengers so that he won't be able to win the race by default.

Flying Paster, the West Coast's star 3-year-old, and General Assembly both could be genuine Derby favorites in an ordinary year. Three other colts-Screen King, Lot O' Gold and Bishop's Choice-are reliable and talented enough to be considered legitimate Derby entrants.

Still, Spectacular Bid overshadows them all. He won the 2-year-old championship last year and he ran even better this winter, capturing with ease all four of his starts in Florida. But this last victory, in the Flamingo Stakes at Hialeah, was not nearly as impressive as the others and it suggested (to me at least) that the colt might be tailing off.

Fortunately, there will be an easy, unequivocal way to assess Spectacular Bid's condition before the Derby. He is scheduled to run April 26 in the Blue Grass Stakes at Keeneland, which historically has been the most definitive prep for the Derby. In that race, he again will be facing Lot O'Gold, who was his chief rival in Florida.

Spectacular Bid defeated Lot O'Gold by eight lengths in the Fountain of Youth Stakes and probably would have beaten him by about the same margin in the Florida Derby if jockey Ron Franklin had not ridden so atrociously. Both of these were superhorse performances, worthy of Secretariat on his best days.

If Spectacular Bid beats Lot O'Gold by eight lengths or thereabouts in the Blue Grass, he will demonstrate that he is at his peak. The chief question about the Kentucky Derby would concern his chances of breaking Secretariat's track record.

But a narrow margin of victory in the Blue Grass will indicate that the Derby is up for grabs. Even if Spectacular Bid has a two-or three-length edge in ability over his opponents, that could be nullified by the presence of Franklin in the saddle.

If the outcome of the Blue Grass suggests that Spectacular Bid is vulnerable, General Assembly is the colt most likely to beat him. The son of Secretariat had been considered the outstanding member of his generation until Spectacular Bid whipped him twice in the fall.

When General Assembly returned to competition this seasion, he lost his first two starts and was written off as a Derby contender. But last Saturday, in the Gotham Stakes at Aqueduct, General Assembly suddenly regained his old form, whipping the talented but underrated Belle's Gold by three lengths. His time was unambiguously excellent. He covered the 1 1/16 miles more than two full seconds faster than older allowance-class horses did that afternoon.

General Assembly, who will have his final Derby prep in the Wood Memorial Stakes at Aqueduct next Saturday, appears to be peaking at the right time. And he is in the hands of a trainer, Leroy Jolley, who knows how to get a horse ready for the Derby.

Flying Paster has generated a great deal of enthuasism in California, and his fans are talking of the Derby as a classic East versus West confrontation. The colt has won eight of his last nine races, most of them by impressive margins, and he is heavily favored to add today's $250,000 Hollywood Derby to his list of a accomplishments.

As good as his record is, however, Flying Paster has not run fast enough to suggest that he could win the Derby if Spectacular Bid is at his best. Paster's time of 1:48 for 1 1/8 miles in the Santa Anita Derby was moderate, by California standards. His supporters had better wait to watch Spectacular Bid run at Keeneland before they start issuing any optimistic predictions. CAPTION: Picture, Moses Malone of Rockets is blocked by Dan Roundfield. Hawks won to earn conference semifinal berth against Bullets., UPI