The Pentagon on Friday suspended the Voi-Shan subsidiary of Fairchild Industries from getting any new defense contracts, citing evidence that the Culver City-based operation had falsified testing of aerospace nuts, bolts and rivets.
Voi-Shan has been the subject of a criminal investigation by a grand jury convened in Seattle, which earlier this month subpoenaed three current company employees who allegedly were involved in the falsification of testing.
In addition, a civil lawsuit filed by three other current and former employees is pending against Voi-Shan, seeking more than $200 million in damages on behalf of the government. Allegations by those employees made in early 1988 triggered the criminal probe.
The speed with which the Pentagon moved against Voi-Shan apparently reflects a higher than normal degree of concern by federal authorities.
"Most of the time, we wait for an indictment to suspend a contractor, but this time we felt that there was adequate evidence to suspend them now," said Larry Wilson, spokesman for the Defense Logistics Agency, the Pentagon unit that took the action.
Voi-Shan reportedly has put three of its supervisors on leaves of absence, but Voi-Shan Vice President Thomas E. Spoehr declined to answer calls Friday at his office. Spoehr's secretary said the company was declining comment on any and all questions.
The suspension, which was invoked by the Pentagon's Office of Contracting Integrity, prevents all Voi-Shan units from obtaining new government contracts while the suspension remains in force.
Wilson, the Pentagon spokesman, said Voi-Shan currently has contracts with the Defense Industrial Supply Center for a total of $12.4 million. But those contracts represent just a fraction of Voi-Shan's business, which includes substantial subcontracts to aircraft manufacturers.
Sold to Several Firms
In addition to the direct suspension, the Pentagon often has exerted pressure on other companies to shun a suspended contractor. Typically, it sends letters to other companies saying that the government is "shocked and dismayed" by their willingness to continue doing business with a suspended contractor.
Federal investigators say they have been told that large quantities of parts passing through Voi-Shan's facility in Chatsworth, where the alleged falsification occurred, were sold to various aerospace manufacturers, including Boeing, Pratt & Whitney, General Dynamics, McDonnell Douglas, General Electric and Lockheed.
John Eyer, assistant director of the FBI office in Seattle, added: "It is a priority investigation. If we are talking about something that holds airplanes together, there is some concern. We don't have proof that airplanes are falling apart. We are concerned."
Aerospace fasteners are Fairchild Industries' most important product, accounting for 40% of sales in fiscal 1987. The company has said its fasteners are used on every military and commercial aircraft made in the United States. Military sales account for 40% of those fastener sales.
Employees have made a number of allegations against the company, including reports that when a sample batch of rivets would fail to pass a test, the company would conduct new tests until the batch could pass.
In another instance, the company allegedly supplied test data for its products that indicated rivets or other fasteners had been examined and stamped by "Inspector No. 11" when there was no inspector No. 11. A quality stamp for No. 11 was used by employees when they wanted to pass a bad batch of parts, according to the FBI.