The system cancels ALL pre-war contract requests. It will cancel all awarded civilian and foreign-supplied military contracts too. The game then should generate new military contracts with higher unit counts.

I would need to confirm with the tutorial videos, but the above should be the case. Check the War tutorial videos to be entirely sure.

That being said, if you have a save file from before the war with the contract in question, feel free to send it to me. https://wiki.gearcity.info/doku.php?id=troubleshooting:steam_savegamefile

By the way, is there a feature bounty or anything for choosing only some factories to build munitions so that others can build for contracts? That's what I would have liked to do if the contract had worked (and I had won it).

There is: https://www.ventdev.com/forums/showthread.php?tid=3823

Here are a few more bounties that relate to military contracts:
http://www.ventdev.com/forums/showthread.php?tid=3843
https://www.ventdev.com/forums/showthread.php?tid=3844
https://www.ventdev.com/forums/showthread.php?tid=3869
https://www.ventdev.com/forums/showthread.php?tid=4044

And 32 vehicle types limited to military-only contracts.

The first two of those bounties would obsolete the issue you're running into. There would be no need to end military contracts so long as the two countries are aligned.