How did central economic planning use contracts between Soviet state enterprises?

In the Soviet Union, central economic planning functioned by translating broad government objectives into specific production and distribution targets. Because the state operated a command economy without a market mechanism to coordinate decisions, these general plans were refined into concrete orders issued to state enterprises.123

To implement these orders, state enterprises were legally required to conclude contracts with one another for the production, delivery, transport, and processing of goods. These contracts served as the operational mechanism for executing the central plan at the enterprise level.13

The system relied on state arbitration tribunals to allocate responsibility and resolve disputes when these planned contracts were not fulfilled. Similarly, collective farms were compelled to enter into and fulfill contracts to deliver the majority of their production to the state at prices set below local market levels. This structure ensured that the coordination of economic activity remained a conscious, centralized process rather than a decentralized one driven by supply and demand.13