Performing contrary to most stock prices last week, Washington area blue chips had one of the best weeks of the year.

Johnston, Lemon & Co.'s index of 30' area stocks surged up 3.098 to 108.057, continuing a spring rally. The upward trend reflects, primarily, a recovery of such issues as Drug Fair, which have been close to or at yearly lows (Drug Fair stock jumped 13 percent last week to $7.625 a share). In the same week, the Dow Jones barometer of 30 New York Stock Exchange blue chips gave up 5.12 to 805.80.

With the Business Council predicting over the weekend a slowdown "as severe as any in the post-war period" except for 1973-1975, and the prime rate tumbling, investors are beginning to search for alternatives to short-term instruments that have had high yields because of record interest rates.

Many of these individuals and institutions are looking at common stocks with recession-era growth potential and a number of Washington area firms fit that strategy. Hechinger Co., for example, hit a yearly high last week of $14.625 a share, after reporting a record April as people continue to do more of their own home repairs.

Moreover, an investment atmosphere that favors a bit more taking of risks in exchange for the potential of future gains appears to be evolving. One result will be a decision by some companies, currently under private ownership, to sell stock to the public for the first time. The so-called new issues market has been dead for many years, but a revival could accompany economic recession.

In the Washington area, a long-time candidate to go public has been BDM International inc., the large professional services company in McLean. To that list now may be added Evaluaton Research Corp. (ERC) of Vienna, formed in mid-1976 to provide engineering, energy, information systems and construction planning services for defense contractors and government agencies.

ERC actually sold shares last year but that offering of stock in the amount of $178,177 was restricted to employes.Now, ERC has hired the investment firm of Johnston, Lemon to assist in defining and initiating a program of possible acquisitions and other financial matters. A public stock offering is considered a possibility in the future, according to local analysts.

Sales of ERC last year were $6.2 million, or double the previous year. Profits jumped to $247,637 (18 cents a share) from $80,050 (7 cents).

Reflecting increased business activities, ERC opened offices in Dahlgren, Va., Oak Ridge, Tenn., and Phoenix. Other offices are located in Arlington, Annapolis and San Diego. At the end of 1979, the volume of contracts on backlog was $2 million.

In the firm's annual report, President Jack Aalseth forecast 1980 sales of more than $10 million.

AD AWARDS: The Washington advertising firm of Earle Palmer Brown & Associates walked away with top honors in the 1980 Addy Awards competition of the Advertising Club of Metropolitan Washington, which were announed Friday night.

The awards are designed to recognize, award and exhibit the best work of Washington's growing adversting business community. Although several of the area's leading firms boycotted this year's competiton, mostly because they have claimed a lack of credibility in past contests, a total of 590 entries were submitted from 63 entrants -- a 26 percent increase from last year.

Earle Palmer Brown had 30 finalists and won 8 Addys; Amtrak and the New York office of Needham, Harper & Steers had 8 finalists and 3 Addys; Needham, Harper & Steers' Washington office had 6 finalists and 2 Addys; Gavatos/Dunn had 6 finalists and 3 Addys; Loewnthal, Walker & Associates had 5 finalists and 2 Addys; Demaine-Lambert had 5 finalists and 3 Addys; J. Walter Thompson's local office had 4 finalists and an Addy, and Ketchum, MacLeod's local office had 3 finalists and 2 Addys.

SALE OF RIGHTS: Biospherics Inc., a Rockville firm, confirmed a potentially significant sale of rights for its wastewater treatment processes -- one that adds an international flavor.

Union Carbide Corp., exclusive licensee of the Biospherics PhoStrip process, has signed a letter of intent to sell its wastewater treatment business to Degremont, S.A., of France. Included in the sale are the patents, trademark, technology and license rights to the Biospherics invention.

Degremont is one of the world's foremost producers of water and wastewater treatment systems, with operations in 80 nations. Biospherics President Gilbert Levin said Union Carbide had requested approval of the local firm, which is required. "Degrement has a fine reputation in the wastewater treatment market and we look forward to discussing with Degremont its plans for marketing PhoStrip throughout the world," he stated. Levin added that his firm is now assessing the situation to determine its answer to Union Carbide.

Last year, Biospherics earned $340,000 in royalties on the PhoStrip process, an economical system to remove phosphates from sewage.