NEW YORK (AP) _ The Small Business Administration let controversial defense contractor Wedtech Corp. win no-bid federal contracts despite being told the company was ineligible because it was not minority-owned, a newspaper reported Sunday.

An SBA committee concluded in 1983 that Wedtech could not be classified as minority-owned because its stock had become publicly owned and traded, the New York Daily News reported.

However, high-level officials at the federal agency allowed Wedtech to remain in the no-bid program three more years, the News said.

The SBA awarded Wedtech $200 million in no-bid contracts under the program, which is designed to help companies owned by economically deprived minorities to get a foothold in the marketplace.

Ming Yee, now an SBA contract officer in San Diego, was a member of the committee. He told the News his office had received instructions that ''anything involving Wedtech was to be forwarded upward,'' to higher levels at the SBA.

The state is seeking to determine whether the company fraudulently portrayed itself as minority-owned to qualify for no-bid work.

A federal investigation centers on Wedtech's relationship with Lyn Nofziger, former political aide to President Reagan.

Published reports have said Nofziger lobbied the White House on behalf of Wedtech four months after quitting his post in the executive branch. Federal ethics laws prohibit government employees from lobbying their former employers for one year after their departure from office.

On Friday, Wedtech closed one of its five Bronx plants, which had employed 200 people. Company officials said reports of the investigations had made financing scarce and left Wedtech near bankruptcy.