In a move likely to cost a number of area employees their jobs, Lockheed Missiles & Space Co. said yesterday it will close by Sept. 1 the Fairfax office of its computer services subsidiary, which has not met the high expectations that accompanied its creation.

The subsidiary, Lockheed Integrated Solutions Co., was launched on Aug. 1, 1988, amid great fanfare, with former assistant defense secretary Donald Latham as its president, a choice that many industry analysts saw as immediately making the company a major player in the hotly competitive federal market.

Out of seven contract bids it has made, the company said, it has won one $15 million job, lost two and has four pending. That situation has prompted industry analysts to conclude that yesterday's announcement is tantamount to an admission that the local company could not cut it in the federal contracts market.

"It's no surprise that they're quietly folding their tent, at least in this town," said Ulric Weil, president of Weil & Associates, a computer industry consulting firm.

"They just didn't make it. Latham came in with great fanfare, and he thought just by his name he could get federal contracts. He didn't get one. You can only be unsuccessful so long before senior management says this isn't working. Then it's curtains."

Lockheed Missiles & Space President John McMahon called the move a restructuring and said consolidating the contracting functions in the company's Santa Clara, Calif., office would provide better support for its government customers.

"That's just not credible," Weil said. "The federal defense market is weak as it is. If that business really came at locations away from Washington, would {Lockheed's competitors} invest large resources here?"

A Lockheed spokesman said the consolidation will make it more competitive. He also said the company expects the move to save between $6 million and $7 million a year.

The spokesman said that as many as possible of the Fairfax office's 90 employees would be transferred to the Santa Clara headquarters, but the exact number would not be determined until mid-August.

One of those who won't lose his job is Latham. Yesterday he referred calls to the company spokesman, who said Latham will be retained "in some capacity" that still is being negotiated.

While contracting work is being transferred to Santa Clara, other facets of the local company business will become part of Formtek, a Pittsburgh-based company that Lockheed acquired last October to bolster its commercial and government contracting efforts.