Federal Protective Service Reform Act of 1998 - Amends the Act of June 1, 1948, to redesignate special policemen of the General Services Administration (GSA) as police officers. 
(Sec. 3) Extends the powers of sheriffs and constables granted to such police officers upon Federal property under the GSA Administrator's control to any area within 500 feet from such property and makes such powers concurrent with State and local law enforcement authorities in the area in which the property is located.  Empowers such police officers to:  (1) carry firearms; (2) petition Federal courts for and execute arrest and search warrants; (3) make arrests without a warrant; and (4) conduct investigations, on and off the property of offenses on such property; and (5) coordinate with other law enforcement agencies that have intelligence gathering authority for the protection of such persons and property.  Authorizes police officers to exercise any power granted in such an area if:  (1) the officer reasonably believes that the action is necessary to prevent or stop a felony in progress; (2) the felony is being committed in the presence of the officer; and (3) there is a known, immediate threat. 
(Sec. 4) Increases from $50 to $5,000 the maximum penalty for violations of any rules or regulations with respect to Federal property. 
(Sec. 5) Empowers nonuniformed special law enforcement officers with the same authority outside Federal property (within 500 feet of a Federal area) as police officers have. 
(Sec. 6) Directs the Administrator to establish the Federal Protective Service (FPS) as a separate operating service of GSA. Provides for the FPS to be headed by a Commissioner who:  (1) shall be appointed by and report directly to the Administrator; and (2) has at least five years of professional law enforcement experience in a command or supervisory position.  Requires the Commissioner to:  (1) assist the Administrator; (2) serve as the principal U.S. law enforcement officer and security official with respect to the protection of Federal officers and employees in such property; (3) render assistance to other Federal, State, and local law enforcement agencies upon request; and (4) carry out his or her duties in coordination with the Commissioner of the Public Buildings Service. 
(Sec. 7) Requires FPS police officers' and criminal investigators' pay and benefits to be determined in accordance with a pay and benefits package established by the Administrator that is equivalent to the pay scale and benefits package applicable to U.S. Secret Service Uniformed Division members. 
(Sec. 8) Requires there to be at least 730 full-time police officers in the FPS one year after the enactment of this Act. Prohibits any reduction in such number of officers unless specifically authorized by law. 
Directs the Comptroller General to study and report on the feasibility of merging all building security forces of the executive branch within and under the FPS's supervision. 
(Sec. 9) Directs the Commissioner to prescribe standards for the contracting of security personnel for Federal property.  Provides for such standards to ensure that contract personnel receive adequate training and are subject to the same background check requirements as FPS police officers.
Output: Federal Protective Service Reform Act of 1998