The federal government awarded contracts to two companies yesterday to develop a safer smallpox vaccine -- one that might even be suitable for immuno-compromised people, such as those who have had organ transplants or are infected with the AIDS virus.

The vaccine will be a virus called "modified vaccinia Ankara" (MVA), a severely crippled version of the microbe used as a smallpox vaccine. MVA is unable to replicate in mammalian cells, although it does grow in chicken cells, which is where it is made.

The two companies, Acambis of Cambridge, Mass., and Bavarian Nordic of Copenhagen, will receive a total of $20 million to grow the virus and test it in animals and healthy volunteers. That work should be done by the end of this year, said Gordon Cameron, an executive of Acambis, which received a $9.2 million grant.

Studies will be done next year on people whose immune systems are compromised. Before the studies are complete, however, the government is expected to order 30 million doses of the vaccine as a stockpile for people who could not use the traditional vaccine in the unlikely event that smallpox, eradicated in the 1970s, reappears.

The traditional vaccine, which is also being made and stockpiled, produces a short-lived vaccinia infection in people receiving it. That infection can get out of control, occasionally with fatal consequences, when it occurs in people with damaged immune systems.

MVA was developed by German researchers, who used it in the 1970s to vaccinate people with eczema, a skin condition that can lead to severe reactions from the traditional vaccine. It was found to be extremely safe in them. However, it has never been used in a place where smallpox was circulating, so its protective effects are unproved.

MVA is considered so safe, in fact, that it is being tried as a vector -- a live delivery vehicle -- for numerous experimental vaccines.

At a recent international meeting of AIDS researchers in Boston, Thomas Harrer of the University of Erlangen, in Germany, described an experiment in which 14 people infected with human immunodeficiency virus (HIV) were given an MVA-based vaccine, with only mild side effects, such as fever and headache. A French and Swiss team is testing MVA as the basis for a therapeutic vaccine in 10 cancer patients.

Immune deficiency diseases, however, often impair a person's ability to mount a protective effect from a vaccine. The usefulness of MVA in people suffering from them is an open question.

"Whether at the end of the day there will be an effective vaccine to protect them, I don't know," said Mark B. Feinberg, an AIDS vaccine researcher at Emory University. "Coming up with an effective vaccine to protect immuno-deficient people will be a difficult task."