In this study, a contact algorithm for the finite element analysis of free surface contact problem in materials forming is presented. The proposed contact algorithm consists of two parts. The first is the contact searching part, and the second, the constraint part. The contact searching algorithm does not require any a priori knowledge of the pairs of contact nodes or segments and the impenetrability constraint is satisfied using the penalty function scheme. void colsure in open-die forging was simulated to verify the accuracy and capability of the currently developed contact algorithm. The simulation results, obtained from ABAQUS simulation, were compared well to the experimental data available in the literature.