MONTEREY, Calif. (AP) _ A contractor hired to install a fire sprinkler system in a school chapel merely glued sprinkler heads to the ceiling, according to state investigators.

Dennis Frye, once the Monterey Peninsula's largest contractor of fire sprinklers, faces the possible loss of his license when the Contractors' State License Board holds an administrative hearing Tuesday.

Frye's company installed a system in the chapel at the private York School that consisted of sprinkler heads glued to the ceiling and not attached to water pipes, according to Monterey Fire Prevention Officer Steve Hart.

''I've never seen anything like this'' in 15 years on the job, said Larry McNeely, supervisor of the special investigations unit of the Contractors' State License Board.

''It is extremely callous and morally despicable to do this in a school chapel,'' he said. ''He should not be permitted to be a contractor.''

Fire officials are trying to contact all individuals who have had sprinkler systems installed by Frye to determine if any other irregularities occurred, McNeely said.

In the city of Monterey alone, that could total 75 buildings out of the 125 in which sprinkler systems have been installed since 1981, based on Hart's estimate that Frye did 60 to 70 percent of all work in the city.

In a separate action, Frye, now of Fair Oaks, already has been ordered to pay more than $450,000 to the city of Monterey because of fraudulent installation of water mains that serve fire hydrants on a municipal wharf.

If Frye loses the state action, he could be ordered to pay restitution for the York School work and would be unable to work as a sprinkler system contractor in California.