A telecommunications contractor and its subsidiary, hurt by the recent slowdown in government defense contracting, have filed for Chapter 11 reorganization with the Alexandria Division of the U.S. Bankruptcy Court.

Squires Communications Inc. of 360 Herndon Parkway, Suite 1900, and its wholly owned subsidiary Squires Telesystems Inc., at the same address, filed bankruptcy petitions on June 18 and June 20, respectively. Squires Communications's assets and liabilities were listed at $4 million to $5 million each, and Squires Telesystems was listed as having no assets or liabilities.

Company President Frederick J. Mueller said the federal government last year gave the firm the go-ahead to start work on defense contracts Squires had won.

The Defense Department was to place orders for Squires's telecommunications products but delayed placing them until the last few weeks, Mueller said.

"After last October, after the peace movement, the schedules got out of whack," he said.

In the fourth quarter last year, he said, the privately held company received none of the orders it expected and in the first quarter of this year only 24 percent were received.

"Work built up without the corresponding revenues from the government," he said. More important, Mueller said, the firm maintained overhead expenses in anticipation of the government orders. Because of the change of work schedules, it was unable to generate the revenues needed to cover the overhead.

Squires lost $1 million in 1989 on revenue of $11 million, Mueller said. Most of the loss occurred because of asset writedowns.

Squires Telesystems had been established to provide specialty contracting, but has remained a shell corporation with no operations of its own.

Mueller said the bankruptcy petitions were filed to facilitate negotiations to renew a revolving loan agreement with Signet Bank of Virginia. "Banks are happier when assets are protected," he said. That loan agreement was reaffirmed after the petitions were filed.

Mueller said commercial sales have remained firm and that the government has released several more contracts to Squires in the last six weeks.

Squires Communications, founded 10 years ago, has a central warehouse and headquarters in Herndon and three sales offices in the Washington-Baltimore area.