Trade groups don't usually lobby to dam up the stream of federal dollars flowing to their members, so what Doug Pitcock has to say may startle many lawmakers. On behalf of the construction contractors he represents, Pitcock will urge legislators to vote against set-asides for small business if the issue comes up again in 1985.

It is pitch that Pitcock, president of the Associated General Contractors of America (AGC), has made widely since he took office last year. Set-asides, he argues, have ballooned to the point at which they threaten to damage the industry's open competitive bidding system, which he calls "one of the last bastions of fair labor in our society." And they work against low prices, he says, which are "attainable only by open bidding in a competitive market."

Utilized for around 25 years, set-asides require that a specific percentage of federal or state contracts be reserved for businesses that often face discrimination, such as small companies or those owned by women or minorities. In 1983, contracts worth $14.2 billion were set aside, serving as a life-support system for many such companies.

Pitcock, however, is ready to wheel the life-support equipment into the basement. Although about 85% to 90% of AGC's members have revenues under $17 million, Pitcock says that they support him in denouncing set-asides as "pure reverse discrimination" and "racist." According to Pitcock, "the minorities want a piece of the pie, and I'm not questioning the laudability of their goal." But he argues that set-asides are driving some nonminority contractors out of business.

The 3,500 members of The National Association of Minority Contractors don't see it that way. Executive director Dewey Thomas Jr. is urging members of his group who belong to AGC to withdraw during Pitcock's term. "The AGC's behavior is just intolerable," says Thomas, who sums up Pitcock's views with one word: "outlandish."