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The Air Force, dissatisfied with the pace of safety improvements after a disastrous fire at a Morton Thiokol Inc. plant, has begun docking the company a portion of contract payments for work on the MX missile, the service and company said Tuesday.

The company was notified on Aug. 30 that 15 percent of each month's payment would be withheld, said Capt. Kathi Blevins, a spokeswoman for the Air Force Systems Command.On Sept. 6, the first penalty was applied, and the Air Force is now withholding $767,208 from the firm, the spokeswoman said.

"We took this action because of Thiokol's lack of compliance with contract requirements in that the company has failed to ensure that its employees follow operating procedures, and that there has been a general deterioration of the housekeeping practices related to safety," she added in a prepared statement.

Morton Thiokol holds two Air Force contracts calling for production of first-stage rocket motors for the MX - or Peacekeeper - nuclear ballistic missile. One contract was awarded in fiscal 1985 and totals $93.5 million, and the second was awarded the following year and totals $144.3 million.

Morton's manufacturing plant, 25 miles west of Brigham City, Utah, was shaken by an explosion and fire on Dec. 29, 1987, that left five workers dead. The men were working in a special building known as a casting pit, where solid rocket fuel is poured and set inside the rocket engine's cylinder.

The company was fined last March by the state of Utah for safety violations in connection with the accident.

A 1986 audit performed by the Air Force, obtained after the accident, complained of "marginal" industrial safety and fire protection procedures at the plant.

The Air Force declined Tuesday to spell out in detail why it was now penalizing the company by withholding contract payments, suggesting only that the firm had failed to meet the requirements of an "action plan" it put together to ensure safe operations after the fire.

Rocky Raab, a Thiokol spokesman, agreed Tuesday the company had been informed contract payments were being withheld but said he could not discuss details of what prompted the move.

"We're working very closely with them and we expect to get back in compliance with the contract before very long, but it has been a difficult process," Raab said.

The spokesman said he could not predict when the company would satisfy the Air Force's concerns.