No surprises. They picked the two bidders:

Phase 2, covering final CEV design and production, was scheduled to start with a down-selection to a single industry team in 2008. To reduce or eliminate the gap between the Shuttle’s retirement in 2010 and an operational CEV, the Phase 2 down-selection is planned for 2006.

Results of NASA Administrator Michael Griffin’s Exploration Systems Architectural Study will be incorporated into a Call For Improvements later this year to invite Phase 2 proposals from the Phase 1 contractors.

While, as I said, not a surprise, based on all the scuttlebutt, this really turns up the heat on the contractors. They don’t have four years to convince NASA as to who has the better concept and ability to execute it–they have (possibly less than) one. There will be no fly off, and they’ll now basically write new proposals under contract.