Sundstrand Corp., a major aerospace contractor, has agreed in principle to plead guilty to filing false statements with the government and pay $12.5 million for overcharging on military work, a newspaper reported. The proposed plea agreement covers allegations that the company's Seattle-based Sundstrand Data Control unit improperly included patent-litigation expenses in overhead costs on government military contracts, the Wall Street Journal reported Tuesday, quoting unidentified sources. Sundstrand said in a filing with the Securities and Exchange Commission that it expected to face unspecified criminal charges in both Washington state and Illinois in connection with federal grand jury investigations of its accounting methods for handling government contracts and tax matters. ``The government has advised that it intends to charge the company with criminal violations in both districts,'' Sundstrand's filing stated. The document also reported that the company, Rockford's largest employer, was working on a settlement in one, and possibly both, of the actions. Federal charges could lead to the suspension of new government contracts for Sundstrand, which had $579 million in military sales in 1987. But if the company settled the dispute by paying ``materially adverse fines and penalties,'' it might be suspended only temporarily from new government business, according to Sundstrand's filing.