Paul Plein II, 68, who worked for the federal government for 28 year before retiring in 1986 as deputy associate commissioner for Federal Prison Industries, died of cancer June 25 at the home of a son in Waterford, Va. He lived in Annandale.

He began his government career in 1958 as a budget and program analyst with the Navy Department. He also worked for the Budget Bureau, NASA and the Office of Economic Opportunity before joining the Federal Bureau of Prisons as a budget officer in 1967.

Three years later, he was named deputy associate commissioner for Federal Prisons Industries.

During his years in that post, he was credited by the Justice Department with contributions in such areas as improved budget management. Since retiring from the government, Mr. Plein had been treasurer and a director of KT Enterprises Inc.

Mr. Plein was born in Pennsylvania and came to Washington in 1934. He was a 1949 graduate of Wilson High School and a 1953 graduate of Columbia University. Before beginning his federal career, he served in the Navy for two years and spent three years as an insurance salesman in Baltimore and New York.

He had lived in Falls Church for five years before settling in Annandale in 1963. His hobbies included photography, travel, and carpentry. He had done volunteer work at Canterbury Woods School in Annandale.

Survivors include his wife of 46 years, Marian Hall Plein of Annandale; three sons, Paul III, of Waterford, Scott C., of Fairfax Station, and Dr. L. Christopher Plein of Morgantown, W.Va.; a daughter, Carolyn A. Plein of Annandale; his mother, Clara B. Plein of Fairfax; a brother, Lee W., of New Canaan, Conn.; and nine grandchildren.