Academy and the VUZy, to undertake contract research. 

 Another attraction of contracts for the VUZy is that 

 staff members working on contract R&D receive addi- 

 tional pay (up to half of their base salary) . Those 

 working on state budget-financed projects — no matter 

 how important they may be — get no extra money. -*-"^ 

 These important incentives also increase the leverage 

 of the consumer organization to obtain quality work 

 on time and within cost. 



Today, contractual research is well entrenched in 

 Soviet industry, particularly within the confines of 

 individual ministries. R&D facilities in various 

 sectors of machine building are particularly known 

 for contract research. This form of financing and 

 distribution of assignments is also employed in in- 

 terbranch industrial R&D projects. Contract research 

 has also expanded recently between industry and both 

 Academy and university facilities. While contrac- 

 tual R&D negotiated between performer establishments 

 clearly must take second place to budget-financed 

 tasks of all-union and branch importance, it does 

 create flexibility in the system and promote linkage 

 among the diverse participants in the research-to- 

 production cycle. 



At the same time, there are still serious defi- 

 ciencies in the whole system of economic contracts 

 that limit the effectiveness of this managerial mech- 

 anism of assigning and coordinating plan tasks. The 

 crux of the matter is that contractual commitments 

 are not really binding and cannot guarantee the ac- 

 complishment of fixed assignments. As a worker at 

 the Academy 1 s Institute of Organic Chemistry recently 

 observed, "Experience shows that the partner from in- 

 dustry can at any time and for any reason terminate 

 a contract without assuming any material or moral re- 

 sponsibility for this. "105 xhe monetary sanctions 

 for failure to meet contractual obligations are mini- 

 mal. They are sometimes even paid for out of state 

 budget funds. More important, violations of con- 

 tracts do not adversely affect the evaluation of the 

 offending organization's economic performance, nor do 

 they impact in any meaningful way upon the latter' s 



137 



