Halfway through construction of its new headquarters in South Central Los Angeles, the U.S. Postal Service made a disturbing discovery. At least 20,000 of the nuts and bolts in the building were counterfeit.

So officials ordered contractors to remove all of the substandard, foreign-made fasteners that were masquerading as high-quality, American-made parts.

But the Oct. 1, 1987, Whittier earthquake beat them to it.

During the 5.9 temblor, fasteners holding up five of the building's cement walls snapped. Nearly 100 tons of concrete crashed to the ground, shearing steel beams in the process.

'Would Have Been Killed'

No one was injured, but had the quake occurred just a few hours later, 400 construction workers would have been on the site. "People would have been out there," said Paul Kelly, the building's construction manager. "They would have been killed immediately."

Federal investigators say the Postal Service's experience with counterfeit parts is becoming alarmingly commonplace for both business and government. Over the last 18 months, counterfeit fasteners, ball bearings, valves and circuit breakers have surfaced throughout the nation, and notably where public safety is a vital concern: nuclear plants, commercial airliners, missiles, trucks, buildings, bridges, school buses and even the space shuttle.

"Bad parts is a virus that has contaminated our industrial base," said Rep. Ron Wyden (D-Ore.), who will help lead congressional hearings on the issue expected to begin in February. "Everywhere we turn bad parts are showing up. I think this problem is far greater than anybody ever imagined."

Threat to Safety

Some of those familiar with parts counterfeiting fear a catastrophe in the fields of aviation or nuclear power. The U.S. House of Representatives' subcommittee on oversight and investigations recently concluded after a two-year study of counterfeit bolts, nuts and screws that "it is only a matter of time before a major tragedy strikes." Counterfeit parts, it added, "threaten the safety of every American."

But many administrators in charge of public safety disagree and say a major accident caused by a counterfeit part is unlikely. "This is a very serious issue," said Victor Stello, executive director of operations at the Nuclear Regulatory Commission. "But the potential of a major nuclear accident happening is, at best, fairly small."