The contact stiffness is not affected by the time step size, when SOFT=0 (*CONTACT, Optional Card A). It can be affected, if SOFT=1 and it is definitely affected when SOFT=2 is set.
When SOFT=1, contact stiffness is calculated as follows:
k = max[SLSFAC*SFS*k0, SOFSCL*k1] where
When SOFT=2, contact stiffness is calculated in similar fashion to k1 above and can be scaled by SLSFAC and by SFS. So again, the contact stiffness is proportional to 1/(time step)^2.
Time step can affect contact behavior aside from contact stiffness. The bucket sorting interval is based on a number of time steps. Thus, if the time step is reduced, there will be less time between bucket sorts. Also, the incremental penetrations will likely be smaller if the time step is reduced.