The Navy has continued to award contracts for specially fabricated weapons containers to a small Idaho company despite clear findings of shoddy workmanship and delivery delays, the service's inspector general has concluded.

The performance of the Yanke Container Cop. has been so poor that the Navy should immediately "initiate debarment proceedings" to block the Boise, Idaho, company from receiving additional contracts, added Rear Adm. M.E. Chang in an audit report.Moreover, the Navy needs to determine why its buying agents continued to use Yanke Container and why the service failed to take advantage of "numerous opportunities to default the contractor or demand consideration (penalty payments) . . . ," the report states.

"Yanke Container Corp. contracts indicate a clear inability to perform to contract with regard to delivery and product quality," the Navy auditors found. "This inability has been repeatedly demonstrated in contracts since 1982."

Yanke handled nine of the 19 contracts it received since 1982 by delivering "312 defective new containers, resulting in over $118,000 in additional cost to the Navy," the auditors wrote. "Seven contracts were extended and five were delivered delinquent to contract."

The 11-page audit report, which has yet to be released publicly, summarizes the results of an investigation requested last December by Assistant Navy Secretary Everett Pyatt. The report was released by the Project on Military Procurement, a Washington-based group that helps whistle-blowers.

Yanke owner Richard Fish denied the accusations. "Generally, most of that is untrue. We intend to have our day in court on this."

Fish said in Boise, Idaho, that he had not seen the report, and accused the Navy of investigating his company "behind our back. We have not been notified."

"Many of the things mentioned here are untrue," Fish said, declining to elaborate."

"We are still looking at the facts," said Lt. Janet Mescus, a Navy spokeswoman.

Fish said he asked Sen. Steve Symms, R-Idaho, to intercede.

According to the audit report, the Navy has awarded Yanke 19 contracts since 1982 worth $12.25 million to fabricate aluminum, fiberglass or steel boxes used to ship explosive armaments like the Sparrow, Harm, Harpoon and Standard missiles and the Mk-46 torpedo.