Based on the numerical governing formulation and non-linear complementary conditions of contact and impact problems, a reduced projection augmented Lagrange biconjugate gradient method is proposed for contact and impact problems by translating non-linear complementary conditions into equivalent formulation of non-linear programming. For contact-impact problems, a larger time-step can be adopted arriving at numerical convergence compared with penalty method. By establishment of the impact-contact formulations which are equivalent with original non-linear complementary conditions, a reduced projection augmented Lagrange bi-conjugate gradient method is deduced to improve precision and efficiency of numerical solutions. A numerical example shows that the algorithm we suggested is valid and exact.