A bill to amend the Department of Defense Appropriation Act, 1977, to authorize labor surplus area and small business set-aside programs.

States that nothing in the Department of Defense Appropriation Act, 1977, shall be construed to preclude total labor surplus area set-asides pursuant to Defense Manpower Policy Number 4 if the Secretary of Defense determines that there is a reasonable expectation that offers will be obtained from a sufficient number of eligible concerns so that awards will be made at reasonable prices. Sets priorities for Federal agencies carrying out labor surplus and small business set-aside programs with the highest priority being awarded concerns which are located in labor surplus areas, and which are also small business concerns, on the basis of a total set-aside, and the lowest priority to concerns which are located in labor surplus areas on the basis of a total set-aside.