The Bullets fell flat on their faces for the second straight time last night and it could have ended their playoff hopes.

The Indiana Pacers played cool and stayed calm and the Bullets blundered the game away, 114-107, before 7,531 at Capital Centre.

The defeat dropped the Bullets to 35-39 and 2 1/2 games behind the Chicago Bulls in the race for the sixth and final playoff spot in the Eastern Conference of the National Basketball Association. Chicago (37-36) plays the Knicks in New York Friday. The Bullets are off until Sunday, when they face the Cleveland Cavaliers at Capital Centre.

The Bullets have only eight games remaining, and because the Bulls won the season series with them, 5-1, a tie they have to make up four games.

"It's going to be very touch now," said Bullet Coach Gene Shue. "Even when we lost to New Jersey Wednesday night, we stressed to the players how important tonight's game was. We had to win to put pressure on Chicago. We didn't do it so now we're in real trouble.

What is so upsetting to Shue about the defeats in the last two games is that the Bullets were out of the games mentally.

"It's not unique with teams in this league to come out like we did the last two games," Shue said. "We just didn't perform out on the floor. We didn't come out and force anything in either of these last two games. Instead, we just sat back and let the other teams do things to us.

"When you have to win a game, you have to come out aggressive, not passive."

George McGinnis led the Pacers with 24 points. Johnny Davis had 22 and James Edwards 20. Elvin Hayes scored 23 for the Bullets and Greg Ballard broke out of a two-game slump with 21 points.

The Pacers won the game at the foul line, making 38 or 45 free throws. The Bullets shot only 19 free throws and made nine.

The disparity in the foul shooting wasn't because of the officiating, either. It was because the Bullets committed careless fouls and Indiana was in the penalty situation virtually all night long.

Kevin Porter fouled out for the second straight game and played only 34 minutes.

The playoff-bound Pacers sustained a major blow when forward George Johnson suffered a severely sprained left ankle late in the second quarter; he will be sidelined from two to three weeks.

The Bullets led, 79-78, with 1:42 left in the third quarter. But McGinnis made a free throw, Billy Knight made a 17-footer and then made two free throws for an 83-79 Indiana lead, and the Pacers never trailed again.

The Pacers gradually increased their lead and got it to 97-87 on two more free throws by Knight and a three-point play by Edwards.

"I thought we played hard, but we were too sloppy," said Kevin Grevey. "We made a lot of stupid fouls and that adds up."

"Maybe we're trying too hard. We're always thinking about Chicago and maybe that put extra pressure on us. We should be able to handle it, though.

"The playoff race isn't over yet," Grevey said. "We still have a mathematical chance, but what happened tonight sure put a damper on us."

The Pacers were called for two technical fouls for playing a zone defense in the fourth period and the Bullets converted three technical foul shots as a result.

As another indication of what type of game it was, the Bullets got only eight fast-break points and the Pacers six.