A Senate hearing received testimony on amendments to the Buy Indian Act, which allows the federal government to give preference to Indian businesses when awarding contracts on reservations. The legislation focuses on reservation economic development, sets aside for small businesses all contracts below $1 million, addresses the prompt payment concerns of contractors, and outlines procedures for self-certification of Indian firms and for resolving disputes concerning the legitimacy of particular businesses receiving preferences. Representatives of the Bureau of Indian Affairs and the Indian Health Service discussed the extent of present agency contracts with Indian firms and problems encountered in implementing the Buy Indian Act. A speaker from the National Center for American Indian Business Development discussed: (1) the bottom ranking of American Indians in a national survey of minority owned businesses; (2) previous circumvention of the Buy Indian Act by the use of "front" companies with nominal Indian owners; (3) negative educational and economic statistics from "Indian country" and their relationship to lack of economic opportunity; (4) percentage of Indian-owned firms in 15 states; and (5) positive and negative labor-force, cultural, and environmental factors affecting business development on reservations. Representatives of tribes, Indian-owned businesses, and Indian organizations spoke in support of the legislation. (SV)