The Air Force yesterday suspended Eaton Corp.'s AIL Division from receiving new government contracts and accused the company of fraudulent activities involving B1B bomber contracts.

The service said it was suspending the division because the company appeared to have "falsified progress payment requests and {given} gratuities to government employes."

Progress payments are monthly payments provided to defense contractors to compensate them for completed work.

The Air Force refused to disclose how much money might be involved in the improper progress payments or to put a value on the gratuities.

The service did say that "falsification of progress payment requests began in 1982 and continued to the present" and that gratuities were given to government employes between 1982 and 1985.

A Pentagon official who asked not to be identified said that the alleged illegal gratuities did not appear to be very expensive but that auditors had discovered numerous cases.

"They all appear to be worth less than $50, but they also appear to be improper," the source said.

The source refused to discuss how much the Air Force might have paid AIL because of improper progress payment requests.

Renny Romain, a spokesman for the Cleveland-based company, declined to discuss details of the matter but said the company would contest the action.

"We believe that AIL's current practice in regard to gratuities and progress payment reporting is fully responsible, and we intend to seek an early hearing with the Air Force Debarment and Suspension Review Board to establish that fact," Romain said.

The AIL Division is located on Long Island, N.Y., and is one of the chief subcontractors on the new B1B.

The Air Force has acknowledged to Congress that the so-called electronic countermeasures equipment, or radar-jamming gear, made by AIL for the B1B is not performing up to specification even though the planes are in service.

The Air Force said its suspension would not affect the contracts held by the AIL Division and thus would not hamper the company's continuing efforts to fix the problems with the radar-jamming gear.

The Air Force said the suspension would prevent the AIL Division "from obtaining {new} contracts with any agency in the executive branch of the United States federal government."

Eaton will be given 30 days to contest the suspension, the Air Force said. In the absence of compelling evidence justifying a change, "the temporary suspension will continue until any legal proceedings are completed," the Air Force said.

The service refused to disclose further information about the case because of the continuing investigation.

The suspension comes just two weeks after Eaton announced plans to sell its defense electronics operations.

The Air Force said the alleged improprieties were discovered by the Defense Contract Audit Agency during routine audits.

According to the Air Force, the AIL Division holds contracts worth $3.96 billion, with all but $79 million relating to the B1B. Those contracts will not be affected by the suspension.