Charles F. Mullaly, 70, a retired Defense Department official and a lifelong resident of the Washington area, died of rheumatic heart disease Saturday at his home in Alexandria.

A federal employe for 38 years, Mr. Mullaly was director of civilian personnel in the Army Department for the 12 years prior to his department in 1972. He received the Army's Exceptional Civilian Service Award and the Defense Department's Distinguished Civilian Service Award.

He also was the 1972 recipient of the Society for Personnel Management's Warner W. Stockberger Award for his contributions to federal personnel management.

Mike Causey, who writes the "Federal Diary" in The Washington Post about the federal bureaucracy, observed when Mr. Mullaly retired that he "was considered one of the best, although his dislike of red tape caused some of his peers unhappiness."

Mr. Mullaly was a native of Washington, attended George Washington University and graduated from its law school in 1937. He began his career with the federal government in 1934. He worked with the Commerce Department and the Treasury Department before joining the personnel staff of the old War Department in 1940. He served on active duty with the Navy during World War II.

Following the war, he returned to the War Department, becoming deputy director of civilian personnel for the Army Department in 1954 and director six years later.

Mr. Mullaly was a resident of Alexandria, where he was a member of the vestry and a senior warden of Grace Episcopal Church. He was a member of the Career Executive Breakfast Prayer Group and did volunteer work at Mount Vernon Hospital.

Survivors include his wife, Virginia Rask Mullaly, of Alexandria; a son, Army Maj. Charles F. Jr., also of Alexandria; two sisters, Sister Columba, of the Sisters of Notre Dame in Washington, and Mary Helen Mullaly, of Blue Ridge Summit, Pa., and two grandchildren.