This is what the recently published Army Modernization Strategy 2010 report says about the M4 competition …

“Additionally, the Army will enhance SaaS lethality capabilities through several individual weapon initiatives. In an effort to provide our Soldiers with the best individual weapon available, the Army will sponsor a full and open competition for a new carbine. This competition may provide a possible replacement for the current M4 Carbine. Simultaneously, to meet immediate needs, the Army will
improve the durability and reliability of the M4 Carbine.”

[ Many thanks to Lace for emailing me the info. ]