While all parties in the George Allen contract negotiations were maintaining low profiles yesterday, the Kansas City Chiefs selected a former Allen assistant, Mary Levy, as their new head coach.

Levy, who coached the Redskin special teams in 1972, is the fifth former Allen aide to become a head coach in the NFL. Jack Pardee (Chicago), Ted Marchibroada (Baltimore), Dick Vermeil (Philadelphia) and Jack Patera (Seattle) all served under Allen either in Los Angeles or Washington.

Allen was never considered by the Chiefs, according to Kansas City sources, because the club was not about to pay him the $250,000 the Redskins offered last summer.

The Chiefs also have a powerful owner, Lamar Hunt, and a strong general manager, Jack Steadman. Sources maintain that Allen's current contract difficulties here are a direct result of his unwillingness to yield power in the areas of finance and personnel.

Allen keeps insisting publicly he prefers to stay in Washington, but he told his assistant coaches Monday his status was up in the air.

A source at Redskin Park described Allen's contract problems yesterday as "a battle between people with very large egos."

Allen, listed in the Redskin organizational chart as vice president, general manager and head coach, has had almost complete control over the football operation during his seven years in Washington.

Team president Edward Bennett Williams often has joked that he had given Allen an unlimited budget and "he's exceeded it." Apparently, that is no longer a laughing matter.

After the 1976 season ended, Williams said one of his offseason priorities would be to hire an administrative assistant in charge of finances for the club, a position that has not been filled since Dave Slattery resigned after the 1975 season.

Williams also indicated last summer that the club had just about broken even in fiscal year 1976. With an extra $3 million per season coming to every NFL team under the terms of the latest four-year network television contracts, Redskin profits should increase dramatically.

A new money man reporting directly to Williams would thus become even more important.

Allen already has the highest player payroll in the NFL, with salaries running at $3.6 milliin a year. Allen also leads the league in assistant coaches with 12 - including a full-time stretch and conditioning coach.

No expense is spared in keeping everything up to date at Redskin Park, the team's training and office complex. This year, a 40-yard practice field was completed, a new set of outdoor weights was installed and a platform tennis court was built.

NFL sources say Williams, and team majority owner Jack Kent Cooke, would like to keep Allen's spending in check, and Allen is unwilling to go along.

There also has been speculation around the league that the Redskin ownership may be trying to reduce Allen's control in personnel matters, perhaps with a new general manager.

All eight of the current playoff teams have been built primarily through the draft. While Allen has been successful with his policy of trading draft choices for proven older veterans, critics say that philosophy has finally caught up with the Redskin coach.

They cite the large number of injuries to Allen's older players this year as proof, and insist that with an expanded 16-game regular-season schedule, the emphasis on younger bodies will increase.

One Allen aide who asked not be identified said yesterday that Allen's "not worried [about his contract]. He knows he can get a job in this league."