If the Navy harbored any idea that the proposed transfer of its headquarters from Arlington's Crystal City to Washington's Navy Yard would be politically easy, it was dispelled at a Senate Armed Services subcommittee hearing yesterday.

Chapman Cox, deputy assistant Navy secretary for logistics, testified that the federal government would save about a half-billion dollars between now and the year 2005 by vacating rented offices in Arlington and renovating old buildings and erecting new ones at the Navy Yard off M Street SE at a cost of $280 million. He said the Navy Yard plan was found to be the best in a study of 18 proposals.

But the only three lawmakers present were from Virginia, and they made no secret that in their view, the idea was terrible. Republican Sen. John Warner presided, flanked by independent Sen. Harry F. Byrd Jr. and the invited Rep. Frank Wolf, a Republican from Arlington, who have an estimated 12,000 constituents who would face a longer daily commute if the Navy plan goes through.

Many have protested the Navy proposal. Another 6,000 live in the District and Maryland.

Cox testified that no final decision has been made on the proposed move and that an environmental impact study must be made, which would include an assessment of employe transportation and commuting problems. If the decision is reached, funds would have to be appropriated by Congress. Cox stressed that Congress itself has decided that federal agencies should be housed wherever possible in government-owned, not rented, buildings.

John T. O'Neill, executive vice president of the Building Owners and Managers Association -- some of whose members lease the present Navy headquarters to the government -- testified that the area is rapidly being saturated with office buildings and the government probably would get a better deal by extending its leases rather than moving to the Navy Yard.

After hearing O'Neill support his own point of view, Warner told Cox that the Navy's "economic projections really fall apart" and said he would convene another hearing on the issue.