Bullet Coach Gene Shue said yesterday he is pleased with the progress of his team but, with the start of the regular season 16 days away, he is "nowhere near making a decision on who will make the team."

In fact, he doesn't even know how many he can keep--10, 11, or 12. The collective-bargaining agreement between the National Basketball Association's owners and players expired in July and negotiations are under way now on a new contract. The roster size is a major point being discussed. The owners want to reduce the rosters to 10; the players want them to remain at 12.

Bargaining committees from both sides met yesterday in New York and the owners have a meeting scheduled Wednesday in Chicago. The regular season begins Oct. 29 and, whatever roster size is decided on, the teams have until 6 p.m. Oct. 28 to get to that number.

"We only have a little more than two weeks before the season starts and it's time to start letting people know they have jobs," said Shue. "I'd like to cut the squad to the size it will be in the season so we can start working on some of the finer things, but there is so much competition going on that I'm just not ready to cut yet."

The Bullets still have 16 players in camp, including Kevin Grevey, who hasn't been able to play because of a torn abdominal muscle. Both he and Spencer Haywood (calcium buildup in right calf) missed Thursday's game in New York.

Based on their performances so far, it appears that Bryan Warrick, Frank Johnson, Rick Mahorn, Jeff Ruland, Greg Ballard, Haywood and Charles Davis have roster spots. Grevey most likely will start the season on the injured list.

That leaves John Lucas, Kevin Porter, Carlos Terry, Garry Witts, Don Collins, Billy Ray Bates, Dave Batton and Steve Lingenfelter battling for the remaining spot.

Ballard scored 17 points and Ruland 16 as the Bullets shot 52 percent in the 112-99 victory over Milwaukee at Madison Square Garden. The Bullets play the Cleveland Cavaliers Sunday night in Frederick, Md.

Warrick, who made four of five shots from the field, had 11 points, six assists and a steal in two quarters against the Bucks, sustained a thigh bruise and was unable to practice yesterday. It is uncertain if he will be ready to play the Cavaliers.