Subdomain-interface variational formulation is presented to solve a class of dynamic contact problems of composite structures. The penalty method is used for imposing inequality constraints on contact surfaces and for connecting finite element subdomains that satisfy interface compatibility conditions. As a result, any complex-shaped domain can be easily divided into independently modeled subdomains without considering the conformity of meshes on interfaces. Some advantageous features of the present method are shown through a set a numerical studies with a developed computer code.