This paper presents a formalism for the transient simulation of nonsmooth dynamic mechanical systems composed of rigid and flexible bodies, kinematic joints and frictionless contact conditions. The proposed algorithm guarantees the exact satisfaction of the bilateral and unilateral constraints both at position and velocity levels. Thus, it significantly differs from penalty techniques since no penetration is allowed. The numerical scheme is obtained in two main steps. Firstly, a splitting method is used to isolate the contributions of impacts, which shall be integrated with only first-order accuracy, from smooth contributions which can be integrated using a higher order scheme. Secondly, following the idea of Gear, Gupta and Leimkuhler, the equation of motion is reformulated so that the bilateral and unilateral constraints appear both at position and velocity levels. After time discretization, the equation of motion involves two complementarity conditions and it can be solved at each time step using a monolithic semi-smooth Newton method. The numerical behaviour of the proposed method is studied and compared to other approaches for a number of numerical examples. It is shown that the formulation offers a unified and valid approach for the description of contact conditions between rigid bodies as well as between flexible bodies.