George A. Sawyer, a former assistant secretary of the Navy charged with conflict of interest, was highly praised yesterday in testimony at his trial by his former boss, Navy Secretary John F. Lehman Jr.

"I don't think I ever met anyone with more integrity than George Sawyer," Lehman said at one point in his testimony at Sawyer's trial in U.S. District Court in Alexandria.

Lehman said Sawyer told him he was seeking a job in the defense industry three months before he got one and did not participate in policy decisions while he was job hunting. He then credited Sawyer with "revolutionizing" Navy ship contracting procedures, which he said helped save billions of dollars.

Federal prosecutors are seeking to prove that Sawyer, now a vice president of General Dynamics Corp., concealed contacts he had with the firm in the spring of 1983 while he was working at the Pentagon.

Sawyer also is charged with failing to disclose $833 in travel expenses paid by the company while engaged in job interviews. The firm was a major bidder on contracts for Navy ships and submarines during Sawyer's tenure as overseer of Navy shipbuilding and logistics.

Lehman was called as a government witness. But, as with several others called by prosecutors, his testimony seemed to support Sawyer's defense.

He said that when he hired Sawyer in 1981, he assigned him to deal with "the shipbuilding mess we had," including the "General Dynamics mess" at the firm's Electric Boat division in Groton, Conn. Lehman said lack of competition in Navy contracting had given General Dynamics a "monopoly" and caused a host of problems.

Sawyer came up with a plan to tighten contracting procedures, which Lehman said he considered "rather brutal . . . . It was Draconian on General Dynamics."

Sawyer's recommendations were adopted and proved so effective that Lehman said he was able last week to report to Congress $4.4 billion in cost "underruns."

"George told me in February he was going job hunting," Lehman testified. "From that point he did not participate in any decisions as far as I am aware." Asked about Sawyer's May 5, 1983, approval of General Dynamics as a qualified bidder for Navy submarines, Lehman described it as a "procedural enactment of a decision I made two years earlier."

Sawyer's handling of General Dynamics made him attractive to the company's officials, another government witness, General Dynamics Chairman David S. Lewis, testified yesterday. Lewis said he contacted Sawyer to see if he would be interested in a position with the firm, and it was agreed that Sawyer could not work in the firm's marine division.

He said Sawyer traveled to St. Louis on March 25, 1983, for one series of interviews, and in mid-May he went to New York and Chicago for more interviews, with the firm paying travel expenses. At that point, Sawyer had not been explicitly offered a job and no negotiations had been held, Lewis said.

Sawyer filed a formal disqualification with the Navy on May 20 barring him from decisions in the shipbuilding industry and notifying officials he was pursuing employment opportunities with three firms, including General Dynamics, according to yesterday's testimony.

Lewis said he met May 25 with Lehman to tell him his firm would like to make a job offer to Sawyer but was concerned "about the conflict-of-interest issue." Lehman said he would "activate Navy legal counsel on that," Lewis testified.

On May 26, Sawyer met with two Navy lawyers, one of them James T. Tate Jr., assistant general counsel for ethics. On the basis of information Sawyer provided in this meeting, a finding was made that Sawyer could take the job without encountering legal problems.

Tate testified yesterday that if he had known about Sawyer's interviews at General Dynamics, "I would have had an entirely different situation." Even without negotiations during those talks, "there would still have remained the problem of discussions between the head of Navy shipbuilding and one of the leading defense contractors which had been previously undisclosed and which would have raised a major appearance of conflict of interest or impropriety," Tate said.

Sawyer's trial resumes today.