To amend the Panama Canal Act of 1979, and for other purposes.

Amends the Panama Canal Act of 1979 to consent to the Administrator of the Panama Canal Commission accepting an appointment by the Government of Panama to the position of Administrator of the Panama Canal Authority, for which congressional consent is required under the Constitution. Requires as a term of such consent that such Administrator serve without compensation (except for travel and entertainment expenses). Exempts such Administrator from: (1) the Foreign Agents Registration Act of 1938; and (2) certain Federal conflict-of-interest provisions.

Authorizes the Commission to offer and pay a transition separation incentive to a Commission employee if the Commission determines that such separation is necessary to the successful transfer of the Canal system from the United States to Panama. Requires the Commission, prior to obligating resources for such incentives, to submit to specified congressional committees a strategic plan outlining the intended use of such payments. Requires additional payments to the Civil Service Retirement and Disability Fund to cover early retirement expenses of such employees not currently provided for. Requires incentive payment forfeiture in the event of subsequent Government employment within five years of such payment.

Directs the Commission to establish a comprehensive procurement system to be entitled the Panama Canal Acquisition Regulation, which shall mirror the principles of the Federal Acquisition Regulation and effect a smooth transfer of Canal administration from the United States to Panama. Requires such Regulation to take effect no later than January 1, 1999.

Requires the establishment of a Panama Canal Board of Contract Appeals to decide: (1) any appeal from a decision of a contracting officer; and (2) all protests concerning procurement actions. Requires such Board to begin its functions no later than January 1, 1999.

Provides expedited resolution procedures to be followed by the Federal Mediation and Conciliation Service and the Federal Service Impasses Panel with respect to Commission labor-management and employee relations.