SOME PEOPLE were a little upset when the U.S. Army put on a large-scale battle for President Carter at Fort Hood, Tex., last week. When it was first announced that the president was going to visit the base, the Army figured it would shoot up $2 million worth of ammunition to impress their commander-in-chief.

It seemed like just a drop in the bucket, but when the cost of the Battle of Fort Hood became public knowledge, there was an uproar.

The point is that people who criticize expenditures of this kind do not know how Washington works.

The real battle for military supremacy is not between the Soviets and the United States, but among the U.S. Army, the U.S. Navy and the U.S. Air Force. Each service is fighting for the same defense dollar, and constantly trying to impress the White House that they, and they alone, can do the job of providing for the nation's security.

President Carter has seen the Navy in action, and he has witnessed the military miracles of the Air Force. But until his announced visit to Fort Hood, the U.S. Army never had a chance to show what they could do.

Therefore the Army brass decided to go all out to give Mr. Carter something he would tell the folks back in Plains, Ga., about for years to come.

The first thought was to put on a parade for Mr. Carter, and have all the troops at Fort Hood march by the president's grandstand in splendid review.

But then a general in plans and operations suggested:

"Why don't we shoot off every gun we have? Carter has seen lots of parades but he's never seen the Army fire its weapons in anger."

"That will cost at least $2 million," another general said. "Where are we going to get that kind of money?"

"We'll take it out of petty cash," a third general said. "Hell, when are we going to get the prez to visit one of our bases again? If he sees those guns and flamethrowers in action, he'll finally know who can give him the biggest bang for the buck."

"Then it's agreed. We'll put on the greatest mock battle in United States history. But it must be a military secret. It has to be a surprise attack or the swabbies and fly boys will do us in. We'll call it 'Operation Lance.' The president will like that."

Unbeknownst to the Army planners, an Air Force U-2 pilot plane was circling the Pentagon and picking up every word the generals were saying.

A U.S. Naval Intelligence officer confirmed what the U-2 pilot had reported, by bugging a bar girl's hotel room just off the Fort Hood base.

Realizing what the Army was up to, high Navy and Air Force officers, working together for the first time, decided to launch a preventive strike, so that their 1980 budget targets could not be knocked out by 'Operation Lance.'

They leaked the cost of the firepower display to the press, knowing that with a taxpayers' revolt going on in this country, the Army would have to cancel its show.

The strategy almost succeeded. What saved the Battle of Fort Hood from being lost was that as soon as the story broke, the Army announced it was cutting back the exercise, and instead of shooting off $2 million in shells, it was only going to fire a lousy $950,000 worth, a sum so trifling, militarily, that even the people who voted for Proposition 13 wouldn't quibble with that.