Now that the Washington Bullet playoff streak has been ended at at L2, the problem facing General Manager Bob Ferry and Coach Gene Shue is how to improve the team without much to traded, without, apparently, a free hand to buy expensive free agents and possibly without Mitch Kupchak and Kevin Greevey, who might be lost in the free-agent market.

"I'm sure the makeup of the team will be much different next year," Shue said. "Because of all the free agents and the new no-compensation rule, it will be one of the most interesting offseasons. We'll have to be very, very sound in what we do.We,re going to have to do a lot of maneuvering."

Replacing Wes Unseld, who is retiring, and keeping Kupchak and Grevey appear to be the Bullets, top priorities.

Under terms of an agreement between the National Basketball Association and its players association, compensation no longer will be awarded teams losing free agents, as has been the case for the past five years. Instead, a team can retain a free agent by matching the best offer, under the provision known as the right of first refusal.

A player can submit only one contract offer to his team, which then has l5 days to either match it or give up the player.

Grevey, one of the top three-point shooters in the league this season, tested the free-agent market two years ago and drew no offers. He re-signed with the Bullets for two years.

The New York Knicks, Phoenix Suns and Los Angeles Lakers are interested in Kupchak, with the Knicks reportedly ready to offer him $500,000 a season.

Kupchak and Grevey said they would like to stay in Washington, but added they will listen to all offers.

"I,ve talked to both of them informally," Ferry said. "The negotiations are open and I think we,re going to sign them."

Signing Kupchak is of major importance because of Unseld,s retirement. Grevey is valuable, but the Bullets have Don Collins and Carlos Terry who can play his position.

As of now, Shue said, rookie Rick Mahorn is his center for next season and Ferry said he feels Mahorn, Kupchak and Jeff Ruland could handle that position.

Ruland, 6 feet l0, was acquired from Golden State during last season,s draft, but played in Spain this year.

"I've talked to his agent throughout the season," Ferry said, "and I think we,ll be able to sign him."

Mahorn, Greg Ballard, Kevin Porter, Terry and Collins are the only players virtually assured of being with the team next season.

Andre McCarter and Anthony Roberts, first signed to l0-day contracts. then for the rest of the season, will have to earn jobs here next year. Shue likes McCarter, so he has a good chance of sticking, but Roberts probably won,t be back. Another not likely to return is Bob Dandridge, a free agent.

Elvin Hayes has another year left on his contract, but he again has made it known that he wants to end his career with a Texas team.

"I've tried to do what was best for ,E, the past few years, but we haven,t been able to make any deals," Ferry said. "I,ll keep trying."

The Bullets can,t expect much help from the draft because they will be the ninth or l0th team selecting in the first round. They have San Antonio's second-round pick and two third-round picks, their own and Detroit's.

We won't draft by position, we'll just go for the best guy left," Ferry said.

Everything points to the free-agent market as the quickest road back to the top for the Bullets.

There are about 50 free agents available, including center Robert Parish of Boston, Scott Wedman and Otis Birdsong of Kansas City, Ray Williams of New York, Paul Westphal, Vinnie Johnson and Gus Williams of Seattle, Alex English of Denver, James Edwards of Indiana, Calvin Murphy of Houston, John Lucas of Golden State and Phil Smith of San Diego.

Ferry doesn't think many of those players will change teams, however.

"I think the right of first refusal means the good players with good character will stay with their present teams because the team will match any offer another team makes," he said. "Nobody wants to lose a good player with character. The ones who will be moving are the good fringe people."

Ferry also said he feels there will be considerable maneuvering by teams having free agents. What Ferry foresees is that, even if a team can't afford to match an offer and keep a player, it might sign him and trade him and his contract.

"This is all so new that we don't know what to expect," said Ferry.

This is still going to be a very difficult job next year," Shue said, "because we're still way behind the competition. We're going to have to make sure we get a decent player in the draft and, if the right trade comes along, we have to make it. It's still going to be hard, though, no matter what moves we make."

Another factor to consider is how much the Bullets' owner, Abe Pollin, is willing to spend for free agents. In the past, Pollin has not entered into many bidding contests, preferring to change the Bullets through the draft and trades. An exception was his signing Dandridge four years ago.