HAWTHORNE, CALIF. -- It began as just another routine inspection with an Air Force official watching Northrop Corp. test a critical part of the MX intercontinental ballistic missile to make sure it could withstand the force of a launch.

The pressure inside the test machine climbed higher and higher. Suddenly, the test apparatus exploded. Machine parts and missile pieces shot across the testing room. One chunk slammed into the inspector's foot, injuring it seriously.

With that dramatic incident in January 1986, the Air Force discovered Northrop had been claiming that heat exchangers -- critical to keeping the MX guidance system from overheating at launch -- had passed major quality-control inspections when the company knew its machine could not even test the parts properly. Full pressure would explode the test machine itself.

That revelation, along with dozens of other reports of production and testing problems with the MX guidance system, has fueled a major controversy over the reliability of one of the most lethal weapons ever built.

The controversy has escalated into major investigations by federal prosecutors, the Justice Department, Air Force, Defense Contract Audit Agency, General Accounting Office and two congressional committees. Several lawsuits have been filed by former employes as well as the Justice Department. The allegations include fraud, shoddy workmanship and financial mismanagement.

Northrop has fallen so far behind in production that 40 percent of the missile force -- 12 of the 30 missiles already in the ground -- is unusable because the missiles have no guidance systems, Air Force officials say. Despite efforts to catch up, Northrop's production of guidance systems is further behind the deployment of missiles now than it was six months ago. Last month, because of production problems, Northrop delivered no new guidance systems to the Air Force. But company officials say they hope to be on schedule by late spring.

In addition, some congressional leaders and Northrop employes charge that the company's poor quality controls and fraudulent test procedures allowed potentially faulty guidance parts to be installed in some MX missiles now on alert at Warren Air Force Base in Wyoming.

"What we're really talking about is the probability of launching a nuclear attack perhaps against ourselves," Rep. Jim Cooper (D-Tenn.) charged in a hearing before the House Energy and Commerce Committee's oversight and investigations panel.

"Any degree of risk in that situation is unacceptable," Cooper said.

The Air Force and Northrop vehemently deny that any faulty parts are in the missiles in silos at Warren AFB and say that the 17 MX missiles test-fired so far have proven more accurate than the Air Force expected.

Brig. Gen. Charles A. May Jr., chief of the Air Force's Ballistic Missile Office, asserts that the MX "is the most accurate missile in the world today."

But internal Northrop reports and congressional documents made available to The Washington Post show that at least 18 guidance parts that were improperly tested or inaccurately documented have been used in missiles deployed at Warren. Northrop officials say that in each case, the Air Force determined the parts were not faulty and approved special waivers to allow them to be used without proper testing and documentation.

And despite higher-than-anticipated accuracy of the missiles tested, the accuracy rate has dropped slightly in the last nine tests, according to an Air Force spokesman. Even though the missile's reentry vehicles hit the target area within the required limits on those tests, the Air Force has postponed the next test at least twice because experts are unable to explain the decline. May said in an interview that the next test date has been pushed back to next spring or summer.

The MX's problems have raised new questions about President Reagan's strategic defense buildup, already weakened by problems that have seriously hobbled the B1 bomber's ability to perform its most sensitive missions.

Called the "Peacekeeper" by the Reagan administration, the MX was envisioned as the crucial land-based anchor of the Pentagon's improved strategic nuclear forces, replacing the older, smaller Minuteman missile. With 10 nuclear warheads and a range of 6,900 miles, the MX is the most powerful missile in the U.S. arsenal, capable of hitting Soviet missile silos with unprecedented accuracy.

The $20 billion MX has had one of the most controversial political histories of any U.S. nuclear weapon. Full-scale development began in 1979 in the Carter administration amid stormy debate over how it should be based. Reagan later won congressional approval for basing 50 missiles in hardened underground silos, but was ordered to find a more survivable way of basing the additional 50 missiles he sought. Last December, Reagan proposed putting the missiles on mobile railway cars to ensure their safety from attack by highly accurate Soviet intercontinental ballistic missiles.

But MX production problems, viewed by some congressional leaders as a Pentagon failure to properly monitor its costly weapons programs, could affect other major programs, with Congress imposing tighter controls over several expensive new weapons systems.

Some congressional leaders charge that the MX difficulties reflect a recurrent flaw in the Reagan defense buildup -- a rush to meet politically imposed development and production deadlines at the expense of quality workmanship.

Such concerns also have put Northrop, a major defense contractor, under the political microscope. Its problems with the MX guidance system and similar problems in its production of a key part of the Air-Launched Cruise Missile have provoked intense scrutiny of Northrop's largest project, the Advanced Technology Bomber or "Stealth" program, estimated to cost $39 billion.

Because most of the company's more than $5 billion in annual sales is to the military, Northrop officials are extremely sensitive to the negative image the MX problems have created.

The Air Force, frustrated by slow production that had delayed planned deployment of the MX, last March issued a searing report on the problems at Northrop. It gave a rating of "marginal" to Northrop's management of the electronics division, citing deficiencies in engineering, manufacturing, product integrity, quality assurance and safety.

"This overall lack of discipline is a major contribution to present production and delivery problems," the report said, adding that it "has created situations where defective parts might find their way into the manufacturing process and thereby create additional delays and concessions."

In April, the Air Force stopped progress payments to Northrop because production was so far behind. The service has withheld $130 million in MX guidance system payments and has contracted with Rockwell Corp. to develop a plan to build the systems in competition with Northrop.

Northrop officials, in interviews and in testimony to congressional committees, said they are unhappy about the Air Force's moves, but say these are strong messages to the company to solve its problems.

Meanwhile, some Northrop employes -- engineers, managers and auditors -- have taken their concerns about the missile problems to the courts, Congress and the public. California attorneys Robert S. Kilborne and Herbert Hafif have filed several false-claims suits against the company on behalf of employes-turned-whistle-blowers.

The employes' eyewitness accounts, congressional investigations led by Reps. John D. Dingell (D-Mich.) and Les Aspin (D-Wis.), and internal Air Force and Northrop documents obtained by The Post provide startling snapshots of how the MX and other programs have been run at Northrop.A Surge in Production

Northrop Electronics Division (NED) is housed in a sprawling sand-colored building here in the Los Angeles suburbs. There are no assembly lines. The workrooms look more like science laboratories than industrial workshops, with many employes draped in surgical gowns and masks.

The workers here build several delicate guidance and navigation systems for some of the military's most important weapons. Some parts require work so precise that they are constructed under microscopes.

The division's main product is the MX's electronic brain, a guidance system called the inertial measurement unit (IMU). It is a basketball-sized beryllium ball crammed with 19,401 fragile parts. Each unit costs the taxpayer $5.8 million.

Although NED accounts for only 6 percent of the company's business, it has been considered key to Northrop's efforts to broaden its reputation beyond that of an aircraft manufacturer. Within three years, the division ballooned from 500 to almost 5,000 employes to carry out what grew into $1.6 billion in contracts for the guidance unit.

But Northrop officials now say NED was not ready to switch from research lab to production facility.

Its managers were overwhelmed, and the production program quickly slipped behind schedule.

Desperate to catch up, the division began cutting corners -- from top management to laboratory workers, according to Northrop officials in interviews, and Air Force audits obtained by The Post. Quality controls were overlooked. Documents tracing the production trail of missile parts -- critical to detecting potential failures -- were not kept. Manufacturing procedures were changed so often that worker instruction manuals could not keep up: An internal Air Force report said that during one period earlier this year, Northrop was making an average of 4,702 planning changes a week in its manufacturing design.

Critical product tests were never done and paper work was falsified; dummy companies were set up to bypass purchasing and inspection processes that employes considered cumbersome; financial abuses proliferated.

"It is a case of management that has run amuck," said Bryan Hyatt, hired as a senior engineer in 1981 and fired last year, he said, for telling the Air Force that defective parts were being placed in IMUs.

Hyatt told a congressional committee: "Their interest is much greater in the delivery of these IMUs to the Air Force than in our capability of delivering them {MX missiles} to the Soviet Union."

Northrop Vice President Frank Lynch told Dingell's Energy and Commerce subcommittee on oversight and investigations last fall that there were "management lapses and errors of judgment in the division."

Congressional leaders say the Air Force, which documented many of the problems as early as 1981, shares blame for not acting quickly to correct deficiencies. Aspin and Dingell also accuse the service, like Northrop, of being more concerned with politically inspired production schedules than quality weapons, allegations the Air Force bitterly denies.

But the Air Force bureaucracy is so compartmentalized that the Ballistic Missile Office's May said he never saw some of the most critical internal audits because it would have been considered intruding on another command's territory.

The Justice Department and Air Force are investigating allegations of financial improprieties, cost mischarging, double billing and time-card alterations -- abuses believed to have cost the Air Force millions of dollars.

Northrop has admitted some allegations, including cost mischarging, and returned about $1.4 million to the government. Northrop public affairs executives declined to allow direct interviews of senior company officials, saying the issues had been fully addressed in congressional testimony in the past year. They add they are conducting their own investigations into the allegations and declined to comment on certain charges.

The company is the subject of a civil fraud suit filed by the Justice Department, at least four civil lawsuits filed under the federal fraudulent claims act, and 10 investigations by various Pentagon agencies. Congressional and defense sources say California grand juries are also probing some allegations of fraud. Northrop officials declined to comment on specific pending legal cases.

Law enforcement authorities and government investigators charge that Northrop arbitrarily reduced testing standards, falsely certified that tests met government standards, and did not conduct some tests for which it billed the Air Force.

Northrop officials have conceded in congressional testimony and interviews that some testing standards may have been administered loosely, but add that each part for the guidance system undergoes so many different tests that problems missed at one checkpoint would be detected in later tests.

The most serious problem caused by some of the irregularities involves the "hybrid" microelectronic circuit, a key guidance-system component, according to an independent Scientific Advisory Board established by the Air Force earlier this year to investigate allegations involving the MX.

The "hybrid" -- about half the size of a matchbox cover -- is a complex collection of microscopic chips connected to a tiny metal plate with hair-thin gold wires. Each guidance system contains 263 "hybrids" to provide the internal communications network for the missile.

Internal Northrop reports made available to The Post and other news organizations by whistle-blowers allege that some of the hybrids do not meet Air Force specifications; some were improperly tested, and Northrop has not kept accurate production and maintenance records on some hybrids, data crucial to tracking potentially defective parts.

Internal Air Force reports obtained by The Post severely criticized Northrop last March for "blatant disregard" for proper procedures in the hybrid lab, noting that in one case it found no written requirements for soldering the hybrid's microscopic parts in place.

The Air Force advisory board confirmed allegations of employe "station shopping" when testing hybrids: "If hybrids failed on one station they would be retested on another and accepted if they passed."

The board reported, "No direct evidence was found that defective hybrids are in the field. On the other hand, the committee was unable to assure itself that all parts in the field meet all specifications. Moreover, the committee is concerned about the level of hybrid engineering discipline at NED."

Northrop, conceding the NED had problems, transferred about 30 managers out of the division, and says the operation will be improved.

"They're making significant changes up and down the line," Northrop President Kent Kresa said in a recent speech to a defense contractors conference. "They are in the process of bringing a lot more discipline to the way we do things . . . . More should have been done, and done earlier. It wasn't. But it is being done now." Sidestepping Procedures

Northrop's MX problems do not end at the hybrids. Internal Air Force documents reviewed by The Post show that as many as 71 MX heat exchangers may have been tested on the machine that exploded when it was taken to full pressure. Each heat exchanger test costs $55,640.

Northrop's Lynch testified to Congress that employes certified parts as having passed tests that they never witnessed because they knew similar tests were being conducted later in the production process.

In another case, the Air Force allowed Northrop to repair cracked electric components with epoxy sealant and return them to production lines. But documents show the Air Force later discovered Northrop was lowering test standards so that more of the repaired parts could pass, while telling the Air Force the tests met full military standards. Company officials in interviews repeated that the work met military requirements.

In yet another case, employes -- with management approval -- set up dummy corporations funded with petty cash accounts of up to $250,000 each to buy test equipment parts directly from suppliers rather than using Northrop's internal procurement process.

Employes said the huge number of design changes being made each week were creating backlogs for new parts, delaying production.

The dummy corporations became so successful at obtaining parts quickly -- sometimes in a day -- that employes from other programs, including a classified avionics program and the super-secret Stealth bomber -- began using the company for some of their purchases, according to Jeff Kroll, a unit manager at NED who operated one of the most successful dummy companies, Engineering Liaison Services.

Although use of such dummy corporations is not illegal, it created two serious problems for which Northrop has been criticized. The parts purchased bypassed Northrop's own quality control; and when previously ordered parts began arriving, the surplus was overwhelming.

Kroll told a congressional hearing that he "witnessed individuals throwing thousands upon thousands of brand new parts into construction dumpsters" to keep the Air Force from discovering what was going on.

While Northrop officials say they have never found evidence that the parts were thrown away, Dingell's staff members found almost 80 boxes of the allegedly discarded materials, including many components plated with .24 karat gold.

Some congressional investigators and Northrop employes allege that the chances are so great that the MX contains defective parts that all the guidance systems should be recalled. Northrop officials and the Air Force strongly deny a recall is needed. They say they do not believe there are any defective parts in the missiles.

"There are too many suspect parts," charged Terry Schielke, a corporate auditor hired by Northrop in 1986 to help probe the NED's problems. "Never have so many innocent people been put in jeopardy . . . . All of the units have got to be torn down and retested."

Schielke, now on leave from Northrop, turned whistle-blower because he said Northrop executives were trying to cover up his findings. Northrop officials deny Schielke's allegations.

Although the company has delivered 66 IMUs, the systems have a 68 percent failure rate, meaning that no more than 18 missiles can be kept on alert. Northrop, as prime IMU contractor, must repair defective units whose most troublesome components were built by subcontractors. This has created a new logjam of new parts that are behind schedule and old parts that need repairs.

In March, for example, an Air Force review found that a subcontracted IMU part was returned to Northrop for more work on Aug. 22, 1985, but still had not been repaired 18 months later. The Air Force found that Northrop had bypassed inspection points and mandatory quality checks, noting, "There appears to be no sense of urgency on the part of the contractor to correct the problems associated with this IMU."

The Air Force also found that a part of one hybrid returned for nonconformances "has been in the manufacturing and repair cycle for 1.4 years," adding, "In that time frame, another four-plus hybrids could have been manufactured from beginning to end." Northrop officials say these are the types of production problems they are trying to solve.

The Air Force's May said the 68 percent IMU failure rate is significantly better than expected at this stage of testing.

But congressional investigators say the failure rate has not improved over the last six months, and Congress may be forced to spend hundreds of millions of dollars for spare guidance systems.

There are other Northrop management problems. Earlier this year, the House Armed Services Committee revealed major problems with testing the Air Launched Cruise Missile (ALCM), another major weapon in the Reagan strategic forces buildup. The Air Force plans to arm the B1 bomber with ALCMs.

Investigations have revealed that the manager of Northrop's Pomona, Calif., plant, where ALCM flight data transmitters are manufactured, ordered plant workers to falsify test results, certifying as complete tests never performed or only partially complete.

Northrop has fired the manager, ordered the plant shut, and moved its operations to a facility in Boston that it says is better run.

Disclosure of MX problems has prompted some employes in Northrop's "black" programs, those kept secret for national security reasons, to allege similar management problems. Congressional investigators are looking into this, according to sources. Northrop denies any Stealth problems.

Northrop's Kresa noted, "Not only have we learned what it takes to make the electronics division function better, but we've learned what we should look for throughout the company to . . . identify problems as early as we can."

As a reminder to employes that the Air Force was returning to Northrop for a major review this fall, the company tacked posters to NED's walls declaring, "They're back!"

But the Air Force has postponed the review twice, saying it would be a waste of time because Northrop has not finished correcting most of the problems found in March when its operation was rated "marginal." Northrop officials say they are confident this rating will be improved.